2013 (10) TMI 1354 - AT - Service Tax

Tribunal classifies appellant as hotel, not club, for Service Tax. Stay granted on disputed tax.

LAHARI HOLIDAY HOMES LTD. Versus COMMR. OF C. EX. & S.T., HYDERABAD-I

The Tribunal ruled in favor of the appellant in a case concerning the classification of the appellant as a club or a hotel for Service Tax liability. The ... - Issues Involved:The issues involved in this case are the classification of the appellant as a club or a hotel for the purpose of Service Tax liability, interpretation of the definition of 'club or association' under Section 65(25aa) of the Finance Act, 1994, and the applicability of Service Tax on the services provided by the appellant.Classification of Appellant:The Commissioner alleged that the appellant, prior to obtaining Service Tax Registration, was providing 'Club or Association's Membership' service and demanded Service Tax, interest, and penalty. The appellant contended that they are a hotel, not a club, as evidenced by their revenue sources and government registrations. They argued that the definition of 'club or association' under Section 65(25aa) of the Finance Act, 1994, does not apply to their activities.Interpretation of Definition:The appellant's contention was supported by the argument that their revenue primarily comes from the hotel business, not from membership services. They cited the definition of 'club or association' under Section 65(25aa) of the Finance Act, 1994, which requires services to be primarily provided to members for a subscription or other amount. The appellant claimed that their activities do not fall under this definition.Applicability of Service Tax:The Revenue relied on a previous Tribunal ruling and the Order-in-Original to support their demand for Service Tax. However, the Tribunal found that the facts of the present case were different from the precedent cited. As a result, the Tribunal ruled in favor of the appellant, allowing a stay on the disputed tax, interest, and penalty during the appeal process.