2018 (9) TMI 1583 - AT - Service Tax

Sale of space for Advertisement Services - Period May 2006 to May 2010 - demand of Service Tax - Held that - What is covered by the Sale of Space for Advertisement Services after amendment, or perhaps the advertisements in business directories, yellow pages and trade catalogues, are those primarily meant for commercial purposes. The sale of space for advertisement in the course of not being in journals which is meant for in-house circulation only, the activity of the appellant is not covered by the definition of Sale of Space for Advertisement Services and, therefore, the same is not exigible to service tax - Demand set aside. Penalty - Renting of Immovable Property Services (RIS) - period June 2007 to March 2010 - demand of Service Tax - Held that - It is submitted that the same issue was under serious litigation before various judicial forums and, therefore, it was too premature to say that there was any service element. The law, as amended from 01.06.2007, till the further amendment by the Finance Act, 2010, saw multiple litigation - penalty set aside. Membership of Club or Association Service (MCA) - period June 2005 to May 2010 - demand of service tax - Held that - The association is not liable to pay service tax since there is no service provider and service recipient; it is only on mutuality concept that the association is run - Demand set aside. Business Support Services (BSS) - Convention Services (CS) - Management Consultant Services (MCS) - Appellant submitted that though the issue involves complexity, he has instructions not to press the demands, but only request for setting aside the penalties and interest, if any - Held that - Undoubtedly the issues involved intricacies, complexities and some of the issues are still being litigated elsewhere. In view of the above the demand on these four items is confirmed, but, however, the penalties set aside. Appeal allowed in part.

Summary

Issues:
1. Taxability of service for sale of space for Advertisement Services
2. Taxability of service for Renting of Immovable Property Services
3. Taxability of service for Membership of Club or Association Service
4. Taxability of service for Business Support Services
5. Taxability of service for Convention Services
6. Taxability of service for Management Consultant Services

Analysis:

1. Taxability of service for sale of space for Advertisement Services:
The appellant challenged the demand for service tax on advertisement charges collected, arguing that the advertisement in their journals is excluded from the definition of taxable service as it is meant for in-house circulation and not primarily for commercial purposes. The appellant contended that even if non-members advertise in the journal, it does not change the fact that it is a book, falling under print media. The Tribunal agreed with the appellant, holding that the activity of the appellant does not fall under the definition of Sale of Space for Advertisement Services and is not liable for service tax. The demand was set aside based on this interpretation.

2. Taxability of service for Renting of Immovable Property Services:
The appellant did not press for the demand related to this service, citing ongoing litigation and complexity of the issue. The counsel requested the deletion of penalties, which was not opposed by the authorities. The Tribunal did not confirm the demand for this service and set aside the penalties accordingly.

3. Taxability of service for Membership of Club or Association Service:
The appellant argued that the association and members are not separate entities, and therefore, the association is not liable to pay service tax due to the mutuality concept. Citing a previous decision, the Tribunal allowed the appeal, following the precedent and granting consequential reliefs.

4. Taxability of service for Business Support Services, Convention Services, and Management Consultant Services:
The appellant did not press for the demands related to these services, acknowledging the complexity of the issues and ongoing litigation. The penalties were requested to be set aside, which was supported by the appellant. The Tribunal confirmed the demand for these services but set aside the penalties.

In conclusion, the appeal was partly allowed based on the specific arguments and interpretations presented for each service. The Tribunal made detailed assessments for each service in question, ultimately deciding on the taxability and penalties associated with them.