2016 (12) TMI 1697 - AT - Service Tax

Appellate tribunal quashes service tax liability for 'Club or Association Service' period, citing legal precedents.

The appellate tribunal set aside the order confirming service tax liability against the appellant for the period 16.06.2005 to 31.03.2011 under the ... Club or association service - no service tax on transactions between a club and its members - following High Court and Tribunal precedentsClub or association service - no service tax on transactions between a club and its members - precedential effect of High Court and Tribunal decisions - Service tax liability of the appellant under the category of 'Club or Association Service' for the period 16.06.2005 to 31.03.2011. - HELD THAT: - The Tribunal held that the tax demand could not be sustained because the question whether transactions between a club/association and its members attract service tax has been decided by the High Courts of Jharkhand and Gujarat in favour of the assessee. Those High Court decisions were followed by this Tribunal in NASSCOM, and in the presence of these settled precedents the impugned adjudication confirming service tax and penalties could not be upheld. Although the Department had taken the issue to the Supreme Court and litigation was pending, no stay was shown; the Tribunal applied the existing High Court and Tribunal authorities to set aside the orders under appeal.The impugned order confirming service tax and penalties is set aside and the appeal is allowed.Final Conclusion: On the authority of the relevant High Court and Tribunal decisions, the Tribunal set aside the adjudication under 'Club or Association Service' for the period 16.06.2005 to 31.03.2011 and allowed the appeal. Issues:1. Service tax liability of the appellant under the category of 'Club or Association Service' for the period 16.06.2005 to 31.03.2011.2. Applicability of Service Tax when the transaction is between the club and members of the said club.3. Legal sustainability of the tax liability based on High Court decisions.4. The impact of pending matters before the Honorable Supreme Court on the case.Analysis:1. The appeal addressed the service tax liability of the appellant under the category of 'Club or Association Service' for the period between 16.06.2005 to 31.03.2011. The original authority confirmed the service tax liability against the appellant and imposed penalties based on seven different show cause notices.2. The appellant's counsel argued that there should be no Service Tax when the transaction occurs between the club and its members. This argument was supported by decisions from various High Courts, including the Sports Club of Gujarat Limited case, Ranchi Club Ltd case, Green Environment Services Coop Society Ltd case, Federation of Indian Chambers of Commerce & Industry case, and NASSCOM case.3. The appellate tribunal considered the legal sustainability of the tax liability in light of the decisions from the Honorable High Courts of Jharkhand and Gujarat. The tribunal noted that the pronouncements of these High Courts, along with the Tribunal's decision in the NASSCOM case, established a precedent that the tax liability during the impugned period could not be legally sustained.4. The Department argued that the matter was pending before the Honorable Supreme Court, but no stay was reported. Despite this, the tribunal, after hearing both sides and reviewing the appeal records, concluded that the impugned order could not be sustained based on the settled legal decisions. Therefore, the tribunal set aside the order and allowed the appeal, following the precedents set by the High Courts and the Tribunal.