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of <h1>Partial win in service tax appeal, upholds liability on non-membership services, rejects mutuality argument.</h1> <h3>Bangalore Club Versus C.C.E. -Bangalore-i</h3> Bangalore Club Versus C.C.E. -Bangalore-i - 2020 (34) G.S.T.L. 552 (Tri. - Bang.) Issues:1. Confirmation of demand under Section 73(2) of the Finance Act, 19942. Appropriation of already paid amounts under TR challan and CENVAT credit3. Confirmation of interest and penalties under Sections 75, 76, 77, and 78 of the Finance Act4. Applicability of service tax on club or association membership services5. Principle of mutuality of interest in service tax liability6. Refund claims based on mutuality of interest principle7. Interpretation of relevant legal provisions and precedentsAnalysis:Confirmation of Demand and Penalties:The appeal challenged an order confirming a demand of Rs. 1,58,12,328 under Section 73(2) of the Finance Act, 1994. The Commissioner also imposed penalties under Sections 75, 76, 77, and 78, along with interest. The appellant contested the order, arguing that the demand was time-barred and invoking the principle of mutuality to negate the service tax liability.Applicability of Service Tax on Club Services:The appellant, an association providing club facilities, was found liable for service tax on club or association membership services. The issue revolved around whether the services provided fell under the category of taxable services, attracting service tax liability effective from June 16, 2005.Mutuality of Interest Principle:The appellant contended that, based on the principle of mutuality of interest, they were not obligated to pay service tax on membership entrance fees and other services provided to their members. Citing various High Court decisions, the appellant argued that no service was rendered between the club and its members, absolving them of service tax liability.Refund Claims and Precedents:The appellant sought refunds for service tax paid on certain facilities to its members, claiming they were not liable to pay service tax. However, the Tribunal referenced past decisions, including the rejection of refund claims by the High Court, to uphold the service tax liability on services other than membership fees.Interpretation of Legal Provisions and Precedents:After considering submissions and precedents, the Tribunal found that while service tax on membership fees was not applicable based on established decisions, the appellant was liable to pay service tax on other services provided to members. The Tribunal relied on the Karnataka High Court's decision and upheld the demand for service tax on services other than membership fees.In conclusion, the appeal was partly allowed, confirming the service tax liability on services other than membership fees based on the Karnataka High Court's decision. The Tribunal's decision was pronounced on November 12, 2018.
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