2012 (12) TMI 644 - AT - Service Tax

Demand of Service Tax - Assessee is a co-operative society - Assessee has set up a common effluent plant for providing effluent treatment to the units of the member industries Held that - Sec. 145 a retrospective exemption is granted in respect of the common facility set up for treatment and recycling of effluents and solid wastes, which is set up with the financial assistance of the CG. Reading of SCN that the assessee has set up the effluent plant with the aid of the Maharashtra State Government, the service provided by assessee is exempted under the retrospective exemption.

Summary

Issues:
1. Confirmation of service tax demand on the appellant for providing club or association service to their members.
2. Applicability of retrospective exemption under Section 145 of the Finance Act, 2012 to the appellant's case.

Issue 1:
The appellant, a co-operative society, filed an appeal against the order confirming the demand of service tax based on providing club or association service to their members. The appellant had set up a common effluent plant for treating effluents from member industries, with financial aid from the Ministry of Environment and the Maharashtra Industrial Development Corporation. A tripartite agreement regulated the affairs among the appellant, the Maharashtra Industrial Development Corporation, and the society members. The Tribunal noted that a retrospective exemption under Section 145 of the Finance Act, 2012, applies to common facilities set up for effluent treatment with financial assistance from the Central Government. Since the appellant's effluent plant was established with aid from the Maharashtra State Government, the service provided by the appellant falls under the retrospective exemption. Consequently, the impugned order confirming the service tax demand was set aside, and the appeal was allowed.

Issue 2:
Section 145 of the Finance Act, 2012 provides a retrospective exemption for club or association services, including those provided by registered cooperative societies, in relation to projects like common facilities for effluent treatment with financial assistance from the Central Government. The notification under this section validates exemption from service tax leviable under the Finance Act, 1994, on such services, dating back to June 16, 2005. The provision also allows for the refund of service tax collected but not due if the exemption had been in force during the relevant period. An application for refund must be made within six months from the date the Finance Bill, 2012 receives the President's assent. The term "project" under this section refers to a common facility set up for effluent and solid waste treatment with financial aid from the Central or State Government. The provisions of section 11B of the Central Excise Act, 1944, apply to refunds under this section. In the present case, the Tribunal found that the appellant's effluent plant, established with assistance from the Maharashtra State Government, qualifies for the retrospective exemption under Section 145 of the Finance Act, 2012, leading to the setting aside of the service tax demand and allowing the appeal.

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