2013 (12) TMI 1269 - AT - Service Tax

Waiver of pre deposit - Service Tax demand - Club or Association service - Held that - The applicant are receiving remuneration on the licence allotted by them to their clients. Out of the total remuneration received by them, they distribute the money to the various members of their society who has assigned their copyright to them and retains certain amount for their own expenditure. Revenue wants to demand service tax on the amount retained by the applicant for their expenditure and membership fees received from the members of the society under the category of Club or Association service - prima facie, the activity undertaken by the applicant are not covered under the relevant category Club or Association service. Accordingly, we waive the requirement of pre-deposit of the entire amount of service tax, interest and various penalties and stay recovery thereof during the pendency of the appeal - Stay granted.

Summary

Issues:
Service Tax demand confirmation with penalties against the applicant seeking waiver of pre-deposit.

Analysis:
The Appellate Tribunal CESTAT MUMBAI, comprising Shri Ashok Jindal and P.R. Chandrasekharan, JJ., heard the case where a Service Tax demand of Rs. 1,64,63,173/- was confirmed along with interest and penalties against the applicant, M/s. Indian Performing Rights Society Ltd. The company was involved in taking assignments of copyrights from artists and granting licenses to clients for using the music. The revenue sought to demand service tax on the amount retained by the applicant for their expenditure and membership fees under the category of 'Club or Association' service.

Upon considering the facts presented by both sides, the Tribunal found that the activity undertaken by the applicant did not fall under the relevant category of 'Club or Association' service. Consequently, the Tribunal decided to waive the requirement of pre-deposit of the entire amount of service tax, interest, and penalties. The recovery of the said amounts was stayed during the pendency of the appeal. This decision was made after a thorough examination of the factual matrix of the case and a prima facie determination that the applicant's activities did not align with the 'Club or Association' service category.

In conclusion, the Tribunal's judgment provided relief to the applicant by granting a waiver of the pre-deposit requirement and staying the recovery of the service tax, interest, and penalties. The decision was based on the finding that the applicant's activities did not fit within the scope of the 'Club or Association' service category, as asserted by the revenue. The Tribunal's ruling ensured that the applicant could proceed with the appeal without the immediate financial burden of making the pre-deposit.