2013 (11) TMI 1461 - AT - Service Tax

Waiver of pre-deposit of Service Tax - Imposition of equal amount of penalty - Club or Association Services - Collection of service charge - Collection of daily charges for spa and entry fees for Tantra - Held that - major portion of the demand relates to Service Tax on the value of services collected on daily basis claimed to be entry fees for entry as well as enjoying all the facilities provided by the Applicant at Tantra - Prima facie, facilities extended to the annual members, who pays the fees on lump sum basis annually enjoy the same facilities as are allowed on daily basis to other persons by collecting the fees on daily basis. At this stage, prima facie, it would be difficult to ascertain whether the persons who enter the said Tantra on daily basis do not enjoy the same status as that of members in absence of cogent evidences adduced by the Applicant - Applicant could not able to make out a prima facie case for total waiver of pre-deposit of dues - Aseessee directed to make pre deposit - Partial stay granted.

Summary

Issues: Application for waiver of pre-deposit of Service Tax and penalty under Section 78 of the Finance Act, 1994.

Analysis:
1. The Applicant sought waiver of pre-deposit of Service Tax and penalty amounting to Rs.54.64 Lakhs. They contended that charging entry fees to a particular service did not amount to providing services under the category of 'Club or Association Services.' The Applicant argued that individuals entering the premises did not receive any services. Additionally, the Applicant's Chartered Accountant highlighted other issues such as non-payment of Service Tax on various services and provided a detailed breakdown of the Service Tax liabilities against each alleged issue. The Chartered Accountant also referenced a Tribunal judgment to support the non-applicability of Service Tax on entry fees.

2. The Revenue argued that the services provided by the Applicant to both members and visitors were the same, with the only difference being the mode of fee collection. They contended that Service Tax should be applicable to visitors paying entry fees on a daily basis. The Revenue acknowledged the payment of Rs.4.53 Lakhs by the Applicant but stated that it was not properly accounted for by the adjudicating authority.

3. After hearing both sides and examining the records, the Tribunal found that a significant portion of the Service Tax demand was related to the entry fees collected on a daily basis at Tantra. The Tribunal disagreed with the Applicant's claim that no services were provided at Tantra, noting that both members and daily visitors enjoyed similar facilities. The Tribunal emphasized the lack of concrete evidence to support the Applicant's argument. The Tribunal also distinguished the case law cited by the Applicant's Chartered Accountant, stating it was not applicable in the present scenario. Consequently, the Tribunal directed the Applicant to deposit Rs.20.00 Lakhs within eight weeks, considering the interest of Revenue and the erroneous payment made by the Applicant during the adjudication process. The Tribunal specified that on compliance, the remaining dues would be waived, and recovery stayed during the appeal process, with non-compliance leading to dismissal of the Appeal without further notice.