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2018 (6) TMI 260 - AT - Service TaxService tax liability - Club and Association Services - mutuality of Interest - insertion of Section 96J vide amendment made in the Finance Act, 1994 w.e.f. 08/04/2011 - Business Exhibition Service - Held that - For the period before 31/03/2008, the new Section 96J of Finance Act, 1994 exempts the service of club and association from payment of service tax on the membership charges collected by such associations - For the period from 1st April 2008 the issue is no more res-integra and reliance placed in the case of SPORTS CLUB OF GUJARAT LTD. VERSUS UNION OF INDIA 2009 (8) TMI 667 - GUJARAT HIGH COURT where it was held that Merely because the clubs are exempted from the levy of income-tax, the respondents could not impose service tax, unless and until the same is permissible under the law. It has now become an elementary principle of law that the question of estoppel cannot arise nor the principle thereof can be applied as against the provisions of law - demand under this head set aside. Service tax on sale of statistical data (statistical service subscription) - transaction of sale of data - Held that - The appellant provide various kind of data pertaining to automobile industry after collecting the same from various sources. This data is available to members as well as non-member on payment of certain charges - it is a transaction of pure sale of data and thus no service tax can be charged on the same. Business Exhibition Service - demand of service tax - Held that - From the record produced by the appellant it appears that service tax has fully been discharged by M/s CII (who has actually organized the auto-expos) in this case. Since the M/s CII have discharged their service tax liability, the same amount cannot be charged to service tax twice - however, there are some differences between the amount of revenue sharing certified by M/s CII and the amount which is shown as receipt from the such exhibition in balance sheets of the appellant for various financial years (which are also subject matter of the present show cause notices and order-in-originals) - Since, this is only a matter of fact which is to be verified by the field level officers, we are inclined to send the proceedings for denovo adjudication only on the question of service tax demand under category of Business Exhibition Service - matter on remand. Appeal disposed off.
Issues Involved:
1. Demand of service tax under the category of Club and Association Service. 2. Demand of service tax under the category of Business Exhibition Service. 3. Demand of service tax on the sale of statistical data. Detailed Analysis of the Judgment: 1. Demand of Service Tax under the Category of Club and Association Service: The service tax demand under the Club and Association Service was bifurcated into two periods: from 16/01/2005 to 31/03/2008 and from 01/04/2008 onwards. The appellant argued that the demand for the period covered by Section 96J of the Finance Act, 1994 (16/06/2005 to 31/03/2008) should be dropped as it exempts service tax on membership fees collected by a club or association formed for representing industry or commerce. For the period beyond 31/03/2008, it was argued that based on the principle of mutuality of interest, no service tax is payable as no one can give service to oneself. The appellant cited several judgments, including the Hon’ble Gujarat High Court in Sports Club of Gujarat vs. Union of India, which was endorsed by the Supreme Court. The Tribunal agreed with the appellant, stating that: - For the period before 31/03/2008, Section 96J exempts service tax on membership charges. - For the period from 1st April 2008, the principle of mutuality of interest applies, as established by various Tribunal and High Court decisions. 2. Demand of Service Tax under the Category of Business Exhibition Service: The appellant contended that they had entered into an MoU with M/s Confederation of Indian Industry (CII), wherein CII organized auto exhibitions and handled all legal formalities, including service tax payments. The revenue from the exhibitions was shared between the appellant and CII. The appellant argued that service tax had already been discharged by CII on the gross amount collected, and thus, it should not be charged again. The Tribunal noted that: - The MoU indicated that CII was responsible for collecting charges and service tax from participants. - CII provided certificates confirming that service tax had been paid on the gross amount collected. - However, there were discrepancies between the revenue sharing amounts shown in the appellant’s balance sheets and the certificates issued by CII. The Tribunal directed a denovo adjudication to verify the differences in revenue sharing amounts and the grants received from the Government of India, which the appellant claimed were for promoting trade and industry. 3. Demand of Service Tax on the Sale of Statistical Data: The appellant provided various kinds of data pertaining to the automobile industry to both members and non-members for a fee. The Tribunal found that this transaction constituted a pure sale of data and thus, no service tax could be charged on the same. Conclusion: The Tribunal set aside the order-in-original demanding duty and penalty under the Club and Association Service based on the exemption provided by Section 96J and the principle of mutuality of interest. The demand for service tax on the sale of statistical data was also dismissed as it was considered a pure sale transaction. The issue of service tax on revenue from Business Exhibition Service was remanded for denovo adjudication to verify the discrepancies in revenue sharing amounts and government grants.
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