2018 (6) TMI 1155 - AT - Service Tax

Club and association service - amounts charged and collected by the appellants for providing various facilities, including bar, games, library, accommodation of guests, office members etc. for the period 01.10.2009 to 28.02.2011 - whether appellant liable to Service Tax or not? - CENVAT credit - Held that - Hon ble High court of Jharkhand in Ranchi Club Ltd. 2012 (6) TMI 636 - JHARKHAND HIGH COURT has inter alia held that rendering service by club to its members is not taxable under the Finance Act, 1994. Impugned order is set aside and the appeal is allowed to the extent that the remaining demand of service tax with interest thereon and penalties imposed on that account will not sustain and are set aside - the appeal by the appellant for being allowed to avail cenvat credit will in consequence fail and is therefore rejected. Appeal allowed in part.

Summary

Issues: Alleged liability of service tax on amounts charged for providing various facilities. Interpretation of relevant legal provisions.

In this judgment by the Appellate Tribunal CESTAT Chennai, the issue in dispute was the alleged liability of service tax on amounts charged and collected for providing various facilities by the appellants. The Commissioner (Appeals) had modified the adjudication order confirming the demand of &8377; 17,36,984/- with interest and penalties, but set aside the demand in respect of certain services. The appellants appealed this decision. During the hearing, the appellant's counsel argued that all services provided were similar to those provided to members, citing judgments from the Hon'ble Gujarat High Court and the Hon'ble Jharkhand High Court. The respondent reiterated the impugned order. The Tribunal noted the judgments from the Hon'ble High Court of Jharkhand and the Gujarat High Court, which held that services provided by a club to its members are not taxable under the Finance Act, 1994. The Tribunal followed the ratio of these judgments and set aside the impugned order, allowing the appeal to the extent that the remaining demand of service tax, interest, and penalties were not sustained. However, the appeal by the appellant to avail cenvat credit was rejected. The appeal was thus partly allowed based on the above terms.