2015 (12) TMI 602 - AT - Service Tax

Cenvat Credit - Club service - Held that - It is a fit case for de novo adjudication as the authority have not considered the issue whether the appellant is entitled to adjustment of credit. Learned Counsel for the appellant submitted that they are ready to produce all necessary documents regarding the credit availed. It is also submitted that the issue of limitation was not considered. In view thereof, the matter is remanded to the primary adjudicating authority for de novo adjudication in the light of the recent judgement regarding the issue whether the services rendered by a Club to its members is liable to levy of service tax and also if taxable whether the appellant is entitled to adjustment of credit; and also consider the issue of limitation. - Decided in favour of assessee.

Summary

Issues:
1. Whether the services provided by a club to its members are liable for service tax.
2. Whether the appellant is entitled to adjustment of credit on inputs, input service, and capital goods.
3. Whether the matter warrants de novo adjudication due to the failure to consider the issue of adjustment of credit and limitation.

Analysis:
1. The case involved a dispute regarding the liability of service tax on the services provided by "The Stainless Club" to its members who were employees of the company. The appellant argued that since the service was provided by the club to its own members, there were no separate entities of service provider and recipient, thus not falling under taxable services. The appellant also cited precedents to support this argument. However, the Department contended that the services provided were indeed chargeable to service tax. The Tribunal found that the issue of whether the appellant is liable for service tax and entitled to adjustment of credit was not adequately considered. Therefore, the matter was remanded for de novo adjudication to address these issues comprehensively.

2. The appellant further contended that even if the services were taxable, they were eligible for credit on inputs, input service, and capital goods used. The appellant claimed that after adjusting the credit, the net demand would be significantly reduced. It was highlighted that the Commissioner (Appeals) failed to consider this aspect and did not provide for the adjustment of credit. The Tribunal acknowledged this argument and emphasized the importance of examining the documents related to the credit availed by the appellant. The case was remanded to the primary adjudicating authority for a fresh assessment considering the issue of adjustment of credit and limitation.

3. In the final decision, the Tribunal allowed the appeal by way of remand, indicating that a de novo adjudication was necessary due to the oversight in considering the appellant's entitlement to adjustment of credit and the issue of limitation. The Tribunal directed the appellant to produce all necessary documents regarding the credit availed for a thorough examination. The primary adjudicating authority was instructed to reevaluate the case in light of recent judgments on the liability of service tax on club services to members and the eligibility of adjustment of credit, along with addressing the issue of limitation that was not previously considered.

This detailed analysis of the judgment highlights the key arguments presented by the appellant, the Department's defense, and the Tribunal's decision to remand the case for further examination of the issues related to service tax liability and adjustment of credit.