2018 (7) TMI 693 - AT - Service Tax

Club or Association Service - Held that - Demand already held to be not payable by the Hon ble High Court of Gujarat in the case of M/s. Sports Club of Gujartat Ltd Vs Union of India 2013 (7) TMI 510 - GUJARAT HIGH COURT wherein by following the ratio laid down by the Hon ble Jharkhand High Court in the case of M/s.Ranchi Club Ltd., Vs Chief Commissioner of Central Excise & Service Tax, Ranchi Zone 2012 (6) TMI 636 - JHARKHAND HIGH COURT the said entry under the Club or Association Service was held to be ultra vires - demand not sustainable. Penalty - Renting of Immovable Property Service - Held that - Inasmuch as, the appellant has discharged the tax liability from the date of assent of the President to the Finance Act, 2012 as also by appreciating the fact that the litigation was going on in respect of the tax liability on Renting of Immovable Property, there are no reasons to impose any penalty upon the appellant - penalty set aside. CENVAT Credit - input services - Rent-a-Cab Service - Health Insurance Services - Air Travel Services - Held that - The issues are no more res integra and stands decided in favour of the assessee by the various Tribunal decisions - reliance placed in the case of M/s. Sanmar Foundries Ltd. Vs Commissioner of Central Excise, Trichy 2016 (4) TMI 1069 - CESTAT CHENNAI and M/s. Fiem Industries Ltd. Vs Commissioner of Central Excise, Chennai-III 2016 (3) TMI 1165 - CESTAT, CHENNAI - credit allowed. Appeals are allowed.

Summary

Issues:
1. Tax liability under the category of "Club or Association Service"
2. Imposition of penalty on service tax on Renting of Immovable Property
3. Denial of Cenvat credit on specific services

Analysis:

Issue 1: Tax liability under the category of "Club or Association Service"
The Tribunal noted that a significant part of the demand against the appellant was confirmed under the category of "Club or Association Service." However, referencing a judgment by the Hon'ble High Court of Gujarat and the Hon'ble Jharkhand High Court, it was established that this category was held to be ultra vires. Consequently, the demand under this category was deemed unsustainable.

Issue 2: Imposition of penalty on service tax on Renting of Immovable Property
The appellant did not dispute the part demand of service tax on Renting of Immovable Property and had already paid it. The challenge was focused on the imposition of penalty. The appellant highlighted the amended provisions of section 80, arguing that no penalty would be leviable if the entire amount of service tax under the said category, along with interest, was paid in full within six months from a specific date. Considering the circumstances, the Tribunal found no justification to impose any penalty and set aside the penalties while confirming the demand of service tax and interest.

Issue 3: Denial of Cenvat credit on specific services
The appellant was denied Cenvat credit on service tax paid for Rent-a-Cab Service, Health Insurance Services, and Air Travel Services, on the grounds that these services were not considered cenvatable input services. However, the Tribunal referenced various decisions in favor of the assessee by other Tribunals. By following these precedents, it was held that the appellant was indeed entitled to the credit. Consequently, the impugned orders were set aside, and the appeals were allowed in the above terms.

In conclusion, the judgment addressed and resolved the issues related to tax liability under specific categories, imposition of penalties, and denial of Cenvat credit on certain services, providing detailed reasoning and legal references to support the decisions made by the Tribunal.