2023 (9) TMI 76 - AT - Service Tax

Non-discharge of Service Tax - receiving payments like registration fees, entrance fees, annual subscription and charges for provision of additional facilities like billiards, swimming pool, lawn tennis, accommodation from its members - demand alongwith interest and penalty - HELD THAT - The Revenue has not adduced any evidence to demonstrate that the appellants have collected the charges for providing any services to the members. They have submitted that only a few members, who are in the category of associated members‟ are only charged. In the facts and circumstances of the case, it is not established with evidence that the appellants are rendering any particular service that is taxable. PCA are registered under the Society Registration Act, the appellants are not liable to pay service tax under the heading Club or Association Service - impugned order cannot be sustained - appeal allowed.

Summary

Issues involved: Applicability of service tax on Club or Association Services u/s 65(25a) of the Finance Act, 1994 and benefit of Section 80 in case of partial payment before show-cause notice.

Summary:
1. The case involved M/s Punjab Cricket Association challenging the Order-in-Appeal confirming service tax liability imposed by the Commissioner (Appeals). The Department alleged non-payment of service tax on various fees received from members. The appellants argued that they are not liable for service tax as per the definition of "club or association" u/s 65(25a) of the Finance Act, 1994, citing a Supreme Court judgment. They also claimed benefit u/s 80 for the amount paid before the show-cause notice.

2. The Department's representatives reiterated the findings of the impugned order, while the appellants' counsel argued that the PCA does not fall under the definition of "club or association" for service tax purposes based on relevant legal interpretations.

3. The Tribunal referred to a Supreme Court judgment emphasizing that entities established or constituted under any law are not included in the service tax net. Since the appellants did not provide evidence of charging for specific services to members and were registered under the Society Registration Act, they were found not liable for service tax under the category of "Club or Association Service." The impugned order was set aside, and the appeal was allowed.