2008 (8) TMI 60 - AT - Service Tax

Assessee a Club having a health centre in its club registered with the Department under the category of Health and Fitness Service charged collected and paid the Service Tax for the period from October 2005 to March 2006 - However later they filed a refund claim on the ground that they are registered under the Karnataka Societies Registration Act as a society held that assessee had rightly paid the tax under the above category hence refund is denied

Summary

Issues:
1. Whether the club is liable to pay Service Tax under the category of "Health and Fitness Service"?
2. Whether the club is entitled to a refund claim for the Service Tax already paid?

Analysis:
1. The appeal was filed against the Order-in-Appeal passed by the Commissioner of Central Excise, where the club registered under the Karnataka Societies Registration Act claimed a refund for the Service Tax paid, arguing they are not liable for it as they provide services to their own members. The lower authority held that the club rendered taxable service falling under "Health and Fitness Service" as per the Finance Act, 1994. The Commissioner (Appeals) upheld this decision, leading to the appeal before the Tribunal.

2. The club contended that no Service Tax should apply to them as the members and the club are considered the same entity, citing various case laws to support their argument. They also challenged the scope of the show-cause notice, claiming that the impugned order went beyond it. However, the departmental representative argued that the club indeed provided health and fitness services, collected Service Tax, and were registered accordingly. The Tribunal analyzed the definitions of "health and fitness service" and "health club and fitness centre" under the Finance Act, 1994. It concluded that the club fell under the category of a "health club and fitness centre" providing taxable services, as they operated a health center for members, making them liable to pay Service Tax.

3. The Tribunal found that the club's subscription fees were for using the health center, which qualified as a health and fitness service. Despite the club's arguments and reliance on case laws, the Tribunal determined that the club correctly paid the Service Tax and was not entitled to a refund. The impugned order was upheld, rejecting the club's appeal as they were deemed to fall under the category of "health club and fitness centre" providing taxable services, as defined by the Finance Act, 1994.