2014 (1) TMI 313 - AT - Service Tax

Demand of service tax - commercial training or coaching - club or association - business support - renting of immovable property - benefit of exemption Notification No. 24/2004 - Held that - On business support service and renting of immovable property services, while it is contended before us that part of the consideration received under these categories is not liable to tax, these contentions are raised only in the appeal. In case of support service of business or commerce, the contention of the appellant is that out of the total amount of Rs.35,08,886/- received under this head Rs.9.32 lakhs represents receipts from individuals who are recipients of the service provided by the petitioner and only Rs.25.7 lakhs is attributable to receipts from corporate entities. In so far as renting of immovable property is concerned, the petitioner contends that Rs. 50,81,391/- out of the total income of Rs.98,31,391 is liable to be taxed on receipts from renting of auditorium and gallery of the petitioner. An amount of Rs.47,50,000/- being receipts from a German non-commercial non-business entity to which space was provided by the petitioner for cultural and educational promotional activities of the German entity viz. DAAD, this amount would be outside the tax net, qua the definition in Section 65(105)(zzzz) read with Section 65(19a) - Conditional stay granted.

Summary

Issues:
Service tax demand confirmation, Exemption under Notification No. 24/2004 for commercial training, Club or association service taxation, Business support service taxation, Renting of immovable property service taxation, Distinct receipts claimed by the petitioner.

Service Tax Demand Confirmation:
The impugned order confirmed a service tax demand of Rs.88,18,758 along with interest and penalty. The proceedings were initiated against the appellant for providing various taxable services, including commercial training, club or association service, business support service, and renting of immovable property services. The tax amounts attributed to each category were specified.

Exemption under Notification No. 24/2004 for Commercial Training:
Regarding commercial training or coaching services, the appellant argued that providing training in the French language should be exempt from tax under Notification No. 24/2004. However, the adjudication authority rejected this claim, stating that the trainees were learning French for multiple purposes, not exclusively for employment. The tribunal found that the acquisition of knowledge and skills in the French language was indeed for enabling employment or self-employment, thus qualifying for the exemption.

Club or Association Service Taxation:
The tribunal noted that the issue of club or association service taxation was already settled in favor of the assessee based on a previous decision of the High Court of Jharkhand. This aspect did not require further deliberation.

Business Support Service and Renting of Immovable Property Service Taxation:
The appellant contended that only a portion of the consideration received under business support service and renting of immovable property services should be taxable. They argued that certain receipts were not liable to tax, such as amounts received from individuals or non-commercial entities. However, these contentions were raised only during the appeal, and the tribunal found no basis for the distinct receipts claimed by the appellant in response to the Show Cause Notice.

Distinct Receipts Claimed by the Petitioner:
The appellant put forth specific arguments regarding the taxability of certain receipts under business support service and renting of immovable property service. However, the tribunal found that these claims were not substantiated with a valid basis, as they were presented only after the adjudication process had commenced. Consequently, the tribunal did not uphold these claims.

Conclusion:
The tribunal granted a waiver of pre-deposit and stayed further proceedings on the condition that the appellant remit a specified amount representing the service tax on business support service and renting of immovable property service, along with interest, within a stipulated timeframe. Failure to comply with this condition would result in the rejection of the appeal. The counsel was duly informed of this order, and the stay application was disposed of accordingly.