2018 (4) TMI 841 - AT - Service Tax

Sponsorship service - reverse charge mechanism - Held that - the services, in this case, provided by the appellant should appropriately classifiable under sponsorship service as defined under Section 65 (99) (a) of the Act - Since under such category of service, the service receiver is liable to pay Service Tax under reverse charge mechanism, the appellant being a service provider cannot be fastened with the service tax liability. Club or association service - appellant received the subscription of membership fees from its member during the period 01.04.2005 to 15.06.2005 - Held that - club or association service defined under Section 65 (105) (zzze) was brought into the Service Tax net only with effect from 16.06.2005 - Since the services were provided by the appellant prior to such effective date, service Tax demand cannot be confirmed under that category of service. Sale of space for advertisement in print media - Held that - sale of space for advertisement in print media is specifically excluded from the definition provided in Section 65 (105) (zzzm) of the Act - Service Tax demand under such category of service cannot be confirmed against the appellant. Non-payment of service tax - security deposit - membership fees - Held that - the appellant submitted that since the membership fee and security deposit were not realised by the appellant, no service tax is required to be paid thereon. However, such aspects have not been dealt with by the authorities - appeal allowed by way of remand. Appeal disposed off.

Issues:
1. Discrepancy in figures between ST-3 returns and balance sheet.
2. Classification of services provided by the appellant.
3. Taxability of subscription/membership fees.
4. Taxability of charges for advertisement space.
5. Taxability of security deposits.
6. Non-realization of membership fees and security deposits.
7. Imposition of penalties.

Analysis:
1. The case involved a discrepancy in figures between the ST-3 returns and the balance sheet of the appellant, leading to a Service Tax demand confirmed by the Department. The impugned order upheld the demand, which was challenged in the appeal.

2. The appellant provided services related to annual conventions of tour operators, which were classified under different taxable categories by the Department. The advocate argued for a different classification, specifically under sponsorship service. The Tribunal analyzed the nature of the services provided and concluded that they fell under sponsorship service, relieving the appellant from the Service Tax liability under business exhibition service.

3. Regarding the taxability of subscription/membership fees, the Tribunal noted that the club or association service was introduced after the services were provided by the appellant. Therefore, the demand confirmed under this category was set aside.

4. Charges received from members for the sale of advertisement space in print media were found to be excluded from the taxable service definition, leading to the dismissal of the Service Tax demand under this category.

5. The Tribunal addressed the issue of non-payment of Service Tax on security deposits, emphasizing that factual aspects regarding the return of deposits and non-realization of fees needed further examination by the original authority.

6. The non-realization of membership fees and security deposits due to cheque bounce was argued by the appellant, highlighting the need for a detailed assessment by the authorities to determine the Service Tax liability accurately.

7. Lastly, the Tribunal found no justifiable grounds for confirming the penalties imposed on the appellant, leading to the setting aside of the penalties under Section 77 & 78 of the Act.

In conclusion, the appeal was disposed of with decisions favoring the appellant on various issues related to the classification and taxability of services, while emphasizing the importance of a thorough examination of factual aspects regarding non-realization of fees and deposits.

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