2015 (9) TMI 1033 - AT - Service Tax

Demand of service tax - Club service - Held that - The appellant collected the membership fees from the member to promote club service which would clearly cover by the decision of Hon ble Gujarat High Court 2013 (7) TMI 510 - GUJARAT HIGH COURT . In view of that, the impugned order cannot be sustained and accordingly, it is set aside - Decided in favour of assessee.

Summary

Issues Involved:
Interpretation of service tax on advance receipts for club services; Applicability of previous court decision on service promotion; Membership fees vs. subscription fee distinction.

Interpretation of service tax on advance receipts for club services:
The appellant applied for early hearing of the appeal regarding service tax demand on advance receipts from club members for specific club services. The Tribunal found that the demand was raised on advance receipts without clear evidence of the amount collected for rendering services. The appellant argued citing a previous Gujarat High Court decision regarding service promotion being ultra vires. The Tribunal examined the case and concluded that the appellant collected membership fees to promote club services, which aligns with the High Court decision. Consequently, the impugned order was set aside, and the appeal was allowed.

Applicability of previous court decision on service promotion:
The Authorized Representative contended that the Gujarat High Court decision was only applicable to services rendered to members, not to subscription fees. However, the Tribunal disagreed with this interpretation. It was determined that the appellant's collection of membership fees for promoting club services fell within the scope of the High Court decision, leading to the setting aside of the impugned order and allowing the appeal.

Membership fees vs. subscription fee distinction:
The distinction between membership fees and subscription fees was crucial in this case. The Tribunal clarified that the appellant collected membership fees to promote club services, which was deemed covered by the previous High Court decision. This distinction played a significant role in the Tribunal's decision to set aside the impugned order and allow the appeal, ultimately disposing of the Early Hearing application.

This detailed analysis of the judgment highlights the key issues involved and the Tribunal's reasoning behind the decision, emphasizing the interpretation of service tax, the application of previous court decisions, and the distinction between membership and subscription fees.