2015 (9) TMI 260 - AT - Service Tax

Club or Association Service - Amount received from Vanprashta Ashram Donations - Held that - Service Tax demand of ₹ 10,55,273/- is on consideration received on rendition of Intellectual Property Service, the consideration was received from M/s Media Content & Communications Services (I) Pvt. Ltd. , a Star New channel entity, under an agreement dated 12.10.2006 between MCCS and the appellant whereunder the appellant assigned to MCCS the right to hold the entire copyright vested, contingent or future, in all media, all rights of action and all other rights of whatever nature in and to the products and the service of the appellant in the program Yog Yatra , which included a right to cover, in terms of the agreement, Yog Shivirs conducted by the appellant. Petitioner has made out a prima facie case though not a strong prima facie case, in respect of its immunity on this demand. We therefore, direct pre-deposit of ₹ 22 lakhs (approx. 50%) in respect of this demand. In respect of the demand of ₹ 10,55,273/- on rendition of Intellectual Property Right service since the agreement has covenants, expressing confirment of appellant s copyright in the Audio Visual Content in favour of MCCS and since copyright is an excluded component of IPR service defined in Section 65 (55a) and (55b) read with Section 65(105)(zzze), we are inclined to grant waiver of pre-deposit of the demand of ₹ 10,55,273 - stay granted partly.

Summary

Issues:
1. Service tax demand confirmation by the Commissioner of Customs & Central Excise, Meerut - I against M/s Patanjali Yogpeeth Trust, Hardwar.
2. Taxable services under three categories: Club or Association Service, Renting of Immovable Property, and Intellectual Property Service.
3. Doctrine of mutuality between a Club or Association and its members.
4. Prima facie case for waiver on the quantum of confirmed demand.
5. Pre-deposit requirement for certain demands.

Analysis:
1. The judgment pertains to an appeal filed by M/s Patanjali Yogpeeth Trust, Hardwar against a service tax demand confirmed by the Commissioner of Customs & Central Excise, Meerut - I, amounting to Rs. 5,14,54,521/- along with interest and penalties.

2. The total demand is categorized under three services:
- Rs. 5,03,76,836/- for Club or Association Service, with a significant portion attributed to contributions from members.
- Rs. 22,412/- for Renting of Immovable Property to M/s Vedic Broadcasting Ltd.
- Rs. 10,55,273/- for Intellectual Property Service related to an agreement with M/s Media Content & Communications Services (I) Pvt. Ltd., granting rights for the program "Yog Yatra."

3. The doctrine of mutuality between a Club or Association and its members, as established in various judgments, is considered in the case, indicating a strong prima facie case for waiver on the demand related to contributions from members.

4. The appellant successfully argues for a waiver on the quantum of the confirmed demand based on the doctrine of mutuality and precedents like Ranchi Club Ltd. vs. C.C.E. and FICCI vs. C.S.T., Delhi, showcasing a strong prima facie case for waiver.

5. Regarding the specific demands, the judgment directs a pre-deposit of Rs. 22 lakhs for the demand related to "Vanprashta Ashram Donations" and grants a waiver for the demand of Rs. 10,55,273/- on Intellectual Property Service due to the agreement's copyright confirment. The appellant does not contest liability for the demand of Rs. 22,412/- concerning Renting of Immovable Property.

6. The appellant is instructed to remit Rs. 22,22,412/- within four weeks and report compliance by a specified date, concluding the disposition of the stay application.