2015 (1) TMI 907 - AT - Service Tax

Waiver of pre deposit - Club or association service - Whether the appellant is liable to pay service tax under the category of club or association service on advance enrolment fee or corpus fund collected from the Members - Held that - out of the amount of 12, 61, 322/- demanded as service tax with interest the appellants have paid the entire amount of service tax and 50% towards the penalty as per the directions of the Commissioner (Appeals) - appellant has made out a prima facie case for waiver of predeposit of balance dues and stay against recovery during the pendency of appeal. Accordingly the requirement of predeposit is waived and stay against recovery is granted during the pendency of appeal - Stay granted.

Summary

Issues:
1. Condonation of delay of 67 days.
2. Liability to pay service tax on advance enrolment fee or corpus fund collected from Members.

Analysis:
1. The judgment addresses the issue of condonation of delay of 67 days in filing the appeal. The Appellant sought condonation, explaining that the delay occurred due to the Consultant's demise and subsequent delay in obtaining appeal papers and documents. The Tribunal found the explanation reasonable and granted condonation of the delay, allowing the appeal to proceed.

2. The main issue in this case is whether the Appellant is liable to pay service tax on advance enrolment fee or corpus fund collected from Members under the category of club or association service. The period in question is from 16.06.2005 to 31.03.2010. The Appellant had already paid the entire amount of service tax and 50% of the penalty as directed by the Commissioner (Appeals). The Appellant's Chartered Accountant cited a judgment by the Hon'ble High Court of Jharkhand in the case of Ranchi Club Ltd. Vs CCE & ST Ranchi Zone, which held that there cannot be a demand for service tax on club or association service.

3. Considering the circumstances and the submissions made, the Tribunal found that the Appellant had established a prima facie case for waiver of predeposit of the balance dues and granted a stay against recovery during the pendency of the appeal. Therefore, the requirement of predeposit was waived, and recovery was stayed until the appeal is resolved. The Tribunal's decision was pronounced in open court, providing relief to the Appellant during the appeal process.