2019 (3) TMI 43 - AT - Service Tax

Club or Association Membership Service in respect of subscription and donation collected from their members - demand of service tax - Held that - The demand in respect of Club/Association Service cannot be sustained in the case of M/s. Ranchi Club Ltd. Vs. Chief Commr. of C.Ex. & S.T., Ranchi Zone 2012 (6) TMI 636 - JHARKHAND HIGH COURT - the demand that has been confirmed under Club or Association Services cannot be sustained and is set aside. Supply of Tangible Goods Service in respect of transport vehicles (oil tankers) from their client i.e., M/s. HPCL on hire charge basis as per bulk petroleum products transport agreement between the appellant and M/s. HPCL - Held that - From the agreement and other facts on record it is evident that the contract was for transportation of petroleum products on which service tax under GTA has been discharged by M/s. HPCL themselves. The nature and type of arrangement between the two parties also service to indicate that there is no Supply of Tangible Goods involved in this matter - This being so, the demand made under this category also cannot be sustained and requires to be set aside. Renting of Immovable Property Service - Held that - It is clear that the amounts received by the appellants under the renting category are very much under the threshold limits in each of the years. This being so, in view of the demands earlier set aside, i.e., demand under Club/Association Service and Supply of Tangible Goods Service, there cannot be any further demand under renting since the total amount received would be within the threshold limit. In the circumstances, the demand under renting will also require to be set aside. Appeal allowed in toto.

Summary

Issues:
1. Tax liability under Club or Association Membership Services
2. Tax liability under Supply of Tangible Goods Service
3. Tax liability under Renting of Immovable Property Service

Analysis:

1. Tax liability under Club or Association Membership Services:
The appellants, a Lorry Owners Association, faced a demand for service tax liabilities related to membership fee/subscription under Club or Association Service. The Original Authority and the Commissioner (Appeals) upheld the tax liabilities and imposed penalties. The appellant argued that the demand cannot be sustained based on legal precedents. The Tribunal found that the law, as per the Hon'ble High Court of Jharkhand and CESTAT Chennai, supported the appellant's position. The demand under Club or Association Services was set aside, ruling in favor of the appellants.

2. Tax liability under Supply of Tangible Goods Service:
The appellants were also facing tax liabilities under Supply of Tangible Goods Service for transporting petroleum products. The appellants argued that the service tax was discharged by the service recipient, M/s. HPCL, and there should be no further tax liability. The Tribunal examined the transport agreement and found that no Supply of Tangible Goods was involved. Consequently, the demand under this category was set aside in favor of the appellants.

3. Tax liability under Renting of Immovable Property Service:
The appellants were accused of tax liabilities under Renting of Immovable Property Service for lorry stand parking rent and building rent. The Department had calculated the tax liability for each year, but the appellants argued that the amounts received were within the threshold limits after setting aside the demands for other services. The Tribunal agreed with the appellants, finding that the amounts received fell within the threshold limits. Therefore, the demand under renting was also set aside, and the appeal was allowed in favor of the appellants.

In conclusion, the Tribunal ruled in favor of the appellants on all three issues, setting aside the tax liabilities under Club or Association Services, Supply of Tangible Goods Service, and Renting of Immovable Property Service. The appeal was allowed in toto with consequential benefits, if any, as per law.