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TMI Blog2008 (5) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... r (T) S/Shri Arvind P. Datar, Sr. Advocate, R. Raghavan and M. Kannan, Advocates, for the Appellant. Smt. R. Bhagyadevi, SDR, for the Respondent. [Order per P.G. Chacko, Member (J)]. - After examining the records and hearing both sides, we come across a challenge against demand of Service tax of over Rs. 2.5 crores confirmed against the appellants under the proviso to Section 73(1) of the Finance Act, 1994 as also against penalties imposed on them under various other provisions of the said Act. The subject matter of main dispute in this case is what is called "club or association" service covered under Section 65(25a) of the above Act. Clause (25a) of Section 65, which was inserted w.e.f. 16-6-2005, reads as under "Club or as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod, say, 25 years, and so on. The resort could be used, in this manner, even up to 99 years. The appellants collected various amounts from these time-sharers depending on the length of the time period. The gross amount for purposes of levy of Service tax was determined pro-rata for the aforesaid period (16-6-05 to 30-9-06). The learned Commissioner passed the impugned order in adjudication of a show-cause notice which was issued on 8-3-2007. The appellants are challenging the demand of Service tax both on merits and on limitation. 2. Ld. Sr. Advocate has argued that the appellants did not provide any taxable service in the aforesaid category to the time-sharers. It is submitted that, on the terms and conditions of the agreement enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants were not liable to pay any service in respect of the aforesaid amount. Ld. counsel has also pleaded limitation against the impugned demand. It is submitted that the taxable service in question was introduced only w.e.f. 16-6-2005 and, therefore, the appellants cannot be held to have suppressed any fact material to that service, before the department prior to the said date. It is, accordingly, argued that the extended period of limitation was not invocable in this case. For the present purpose, ld. counsel has also pleaded financial hardships for his client. It is submitted that, as on 31-3-2007, the company has incurred accumulated loss of over Rs. 140 crores. In this connection, ld. counsel has also referred to the Annual R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to by the Sr. Counsel as a saleable product appears to be a "Certificate of Membership", which signifies the so-called time-sharer having been admitted to "membership" for a specified period to enjoy a specified number of "Trump Units" in the holiday resort. This document was issued upon an application for "membership" having been filed by the person concerned. Expressions such as "member", "membership", "associate member" etc. are seen oft-repeated in these records. Prima facie, it appears to us that it cannot be gain-said that the time-sharers are members of the body into which they were admitted as members. The term "membership" presupposes a body of members, which may be called "association" or "club". Ld. counsel has sought to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be filed on or before 24th October and, for the second half year, it has to be filed on or before the 24th April of the next fiscal. Ld. SDR has submitted that, on this basis, the demand of Service tax covered by Annexure-I to the impugned order is within the normal period, amounting to over Rs. 1.34 crores. It is not claimed that the demand covered by Annexure-II to the order is within the normal period. In this frame of the case, we take the prima facie view that the demand covered by Annexure-II to the order is beyond the normal period and the same may not be sustainable on the ground of suppression of facts inasmuch as the party could not have suppressed before 16-6-2005 any fact relevant to levy of Service tax on "club" or "assoc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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