9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 1787 - AT - Service TaxClub and Association services - amount received for corporate membership - amounts received by the Appellant prior to the introduction of the levy of service tax under Club and Association services w.e.f. 16/06/2005 - interest and penalty - HELD THAT - The issue involved in this appeal is no more res-integra in view of the decision of the Hon ble High Court of Rajasthan in the case of CARRIER POINT VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR 2018 (3) TMI 1288 - RAJASTHAN HIGH COURT where it was held that Any payment of contract which are entered after 1-7-2003 will invite Service Tax and any contract which is concluded prior to 1-7-2003 will not invite imposition of Service Tax. In the present case also, it is not in dispute that the department has sought to tax the amounts received as corporate membership prior to 16/06/2005 on proportionate basis after the introduction of the levy of service tax on club and association services - the levy on such amounts cannot be sustained and hence the demand to that extent is set aside. Levy of service tax - Junior and NRI Membership as also on account of Corporate membership from Greaves Cotton Limited - HELD THAT - The Appellants have already paid the service tax on the said amounts, however interest on the same has not been paid by the Appellant. Thus, interest on the said amount is payable by the Appellant for delayed payment of service tax. Penalty - HELD THAT - The levy was itself introduced w.e.f. 16/06/2005 and the major demand itself not being sustainable, the question of invoking suppression cannot be upheld in the current case - penalty under section 78 cannot be imposed on the Appellant. The demand of service tax of ₹ 40,53,468/- along with penalty of ₹ 83,00,000/- is set aside - Interest on the amount of ₹ 1,00,577/- on amount received for Junior and NRI membership and corporate membership of Greaves Cotton limited is to be paid by the Appellant - appeal allowed in part.
Issues involved:
1. Taxability of amounts received prior to the introduction of service tax on Club and Association services. 2. Imposition of penalty under section 78 on the Appellant. Detailed analysis: Issue 1: The primary issue in this case was whether the amounts received by the Appellant before the introduction of the levy of service tax under Club and Association services could be subjected to service tax. The Appellant argued that the demand for service tax on the amount received for corporate membership before the introduction of the levy could not be sustained as the service itself was not taxable at the time of receiving the consideration. The Appellant had paid the said amount under protest. The Tribunal referred to a decision by the Hon'ble High Court of Rajasthan in a similar case, where it was held that contracts concluded before the introduction of the service tax law would not be subject to service tax. Accordingly, the Tribunal set aside the demand for service tax on the amounts received before the levy was introduced. However, the Tribunal held that interest was payable on the delayed payment of service tax on Junior and NRI memberships, as well as on corporate membership from a specific entity. Issue 2: The second issue revolved around the imposition of a penalty of ?83,00,000 on the Appellant. The Tribunal noted that since the major demand for service tax was not sustainable due to the reasons discussed above, the imposition of the penalty could not be upheld. The Tribunal relied on a previous decision where it was held that the demand notice issued after a significant period from the introduction of the clarification by the Board was barred by limitation. Consequently, the Tribunal concluded that penalty under section 78 could not be imposed on the Appellant. As a result, the Tribunal modified the impugned order by setting aside the demand for service tax and penalty, while directing the payment of interest on specific amounts received by the Appellant. In conclusion, the Tribunal partly allowed the appeal filed by the Appellant, setting aside the demand for service tax and penalty, and ordering the payment of interest on the specified amounts.
|
