2015 (11) TMI 565 - AT - Service Tax

Demand of service tax - Club or Association Service - Held that - The consideration on which levy is confirmed is membership fee and other receipts from members and non-members who utilised services provided by the appellant. In respect of services provided to non-members, the same became taxable only w.e.f. 01.05.2011 in view of the amendment to Section 65(25a) of the Act. In the amended definition service provided to non-members was brought within the scope of the taxable service. - In respect of services provided to the appellant s members, the issue is fully covered by the decision of this Tribunal in Federation of Indian Chambers of Commerce & Industry vs. CST, Delhi - 2014 (5) TMI 183 - CESTAT NEW DELHI . Since the period in issue is prior to the amendment of Section 65 (25a), the consideration received by the appellant in respect of services provided to non-members is not taxable during the relevant period in issue. - Decided in favour of assessee.

Summary

Issues:
1. Confirmation of service tax for the period 2008-09 to 2009-10 alleging the provision of Club or Association Service.
2. Taxability of membership fee and other receipts from members and non-members utilizing services.
3. Applicability of the amended definition of taxable service to services provided to non-members.
4. Taxability of services provided to members before the amendment of Section 65(25a).

Analysis:

1. The appeal was filed against the order passed by the Commissioner (Appeals), Customs and Central Excise, Jaipur-II, rejecting the appellant's appeal. The primary assessment order confirmed the service tax for the period 2008-09 to 2009-10, alleging the provision of Club or Association Service by the appellant. The proceedings were initiated through a show cause notice against the appellant, culminating in the impugned order confirming a service tax demand of Rs. 7,60,451/- along with interest and penalties.

2. The consideration for the levy was based on membership fees and other receipts from both members and non-members utilizing the services provided by the appellant. It was noted that services provided to non-members became taxable only from 01.05.2011 following an amendment to Section 65(25a) of the Finance Act, 1994, which brought service provided to non-members within the scope of taxable services.

3. Regarding services provided to the appellant's members, the issue was found to be covered by a previous decision of the Tribunal in Federation of Indian Chambers of Commerce & Industry vs. CST, Delhi. Since the period in question predates the amendment to Section 65(25a), the consideration received by the appellant for services provided to non-members was deemed non-taxable during the relevant period.

4. Considering the above reasons, the appeal was allowed, and it was decided that there would be no order as to costs. The judgment provided clarity on the taxability of services provided by the appellant to both members and non-members, taking into account the relevant legal provisions and precedents set by previous tribunal decisions.