2013 (1) TMI 141 - AT - Service Tax

Waiver of Pre-deposit - Club or Association Service - Assessee is a co-operative society - Maharashtra Co-operative Societies Act, 1960 Set up a Common Effluent Treatment plant for providing effluent treatment to their member industries - Section 145 of the Finance Act, 2012 - Held that - Section 145 of the Finance Act, 2012 granted retrospective exemption in respect of the effluent plants Project means common facility set-up for treatment and recycling of effluents and solid wastes, with financial assistance from the Central Government or a State Government As the 50% of the project cost was raised by the members for setting up the effluent plant and remaining by subsidy i.e. 25% subsidy from Ministry of Environment and Forest, 20% subsidy from MIDC and 5% subsidy from MPCB. Set aside the order in favour of assesse

Summary

Issues:
- Application for waiver of pre-deposit of Service Tax amount
- Taxability of effluent treatment service provided by a co-operative society
- Retrospective exemption under Section 145 of the Finance Act, 2012 for effluent plants
- Financial assistance for setting up the effluent plant
- Sustainability of demand and penalty imposed

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI involved a case where the appellant filed an application seeking waiver of pre-deposit of Service Tax amounting to Rs.1,42,50,531, along with interest and penalties. The demand was confirmed due to the provision of effluent treatment service by the applicant to their member units, categorized as "Club or Association Service."

The appellant, a co-operative society registered under the Maharashtra Co-operative Societies Act, 1960, established a Common Effluent Treatment plant for treating effluents from their member industries. The adjudicating authority upheld the demand and imposed penalties despite the appellant's contention that they were entitled to exemption.

The Tribunal referred to Section 145 of the Finance Act, 2012, which provided a retrospective exemption for effluent plants. The exemption applied to common facilities set up for effluent treatment and recycling with financial aid from the Central and State Governments. In this case, 50% of the project cost was funded by members, and the remaining amount was subsidized by various government bodies.

Considering the retrospective exemption granted to effluent plants set up with government financial assistance, the Tribunal concluded that the demand was not sustainable. Consequently, the impugned order was set aside, the pre-deposit of dues was waived, and the appeal was allowed. This decision highlights the importance of understanding and applying relevant statutory provisions to determine the taxability and exemptions applicable in specific scenarios involving service provision by entities like co-operative societies.