TaxTMI 
TaxTMI 
2025 (8) TMI 4
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....een filed by the Principal Commissioner of CGST & Central Excise (hereinafter referred to as the Department or Revenue) against the Order-in- Original No. 02/PR. Commr/GST & CX/KOL- North/2017-18 dated 10.07.2017 passed by the Commissioner of CGST & Central Excise GST Bhawan, 180, Shantipally, Rajdanga Main Road, Kolkata-700107. 1.2. As both appeals emanate from the same Order-in-Original, they are taken up together for decision by a common order. 2. The facts of the case are that M/s.SPPL having their registered premises at 5, J. B. S. Halden Avenue, Kolkata-700105 and having Service Tax Registration No. AAHCS4966MST001, are engaged in providing taxable services under the category of "Club or Association Service", "Renting of Immovable Property Service", Service", Service". "Mandap Keeper "Hotel or Short Term Accommodation Service" etc. 2.1. Acting on the intelligence that the said appellant-assessee was evading payment of service tax, an investigation was initiated by DGCEI, Kolkata Zonal Unit, Kolkata. The premise of the appellant- assessee was searched on 19.12.2013 by the DGCEI Officers and during the course of search some documents were resumed. Further, the said app....
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.... head 'Short Term Accommodation Service', w.e.f 01.05.2011. Thus, demanding service tax on room rentals under the taxable head of "Club or Association Service" for the period prior to 1.5.2011, is without any legal basis. Accordingly, the appellant submits that the demand of service tax of Rs. 11,50,602/-on room rentals confirmed under the category of 'Club or Association Service' for the period prior to 1.5.2011 is not sustainable and hence the same is liable to be set aside. 3.2. In respect of the demand of service tax of Rs. 22,85,180 under the category of Restaurant, Mandap keeper & Hotel Accommodation Service, by denying the abatement benefit as provided under Notification 1/2006, the appellant-asseesee submits that Notification No. 1/2006-S.T. dated 1-3-2006 as amended provides that service provider will be entitled to claim the benefit of the said abatement subject to the condition that the CENVAT credit of duty on input or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has not been taken under the provisions of the CENVAT Credit Rules,2004. In the SCN, it has been alleged that the appellant-as....
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....- Dropped Club or Association Service 24,516,129.00 2 Advance from Customers- Consider Closing Balance instead of Advance received during the year in SCN- dropped Club or Association Service 2,850,520.00 3 Pre-Receipt shown as liability under B/S- Service tax charged on closing balance of Pre- Receipt Amount- Wrong calculation -dropped Club or Association Service 450,354.00 4 Sports Charges-shown in P/L account -Service Tax paid and Sport Activity fees i.e., under pre reciept income. - Double calcuated in SCN - Dropped due to double considered in SCN Club or Association Service 1,438,817.00 5 Miscellaneous Income-Service tax charged on Misc income but it is actually sale of liquor bottles, newspper,cartons etc. Club or Association Service 89,466.00 6 Service in respect of club restaurant service- Dropped in terms of CBEC instruction letter F.No.B1/6/2005-TRU dtd 27.07.2005 - Not taxable Club or Association Service 3,460,988.00 7 Sundry Debtor(Op-Cl Balance)-Service Tax charged on opening bal of Sundry Deb....
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....the appeal documents. 7. Regarding the demand of service tax of Rs. 11,50,602/- confirmed under 'Short Term Accommodation Service', we observe that levy of service tax on Short Term Accommodation Service has been introduced only w.e.f. 01.05.2011. When a new service is brought into service tax net without changing an existing entry, it is presumed that the earlier entry did not cover the said activity. Therefore, we observe that service tax can be levied on Short Term Accommodation Service only after 01.05.2011. We observe that the appellant has discharged the service tax liability on the rentals received from members as well as non-member under the head Short Term Accommodation w.e.f 01.05.2011. Thus, we hold that demanding service tax on room rentals under the taxable head of "Club or Association Service" for the period prior to 1.5.2011, is not sustainable and accordingly, we set aside the same. 7.1. Regarding the demand of service tax of Rs. 22,85,180/- confirmed on account of denial of abatement as claimed by the appellant-assessee, we observe that Notification No. 1/2006-ST dated 1-3- 2006 as amended provides that service provider will be entitled to claim the b....
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....d hence we set aside the same. 8. Regarding dropping of the demand of Rs. 3,83,66,963/- in the impugned order, we observe that the Ld. adjudicating authority has given categorical findings in respect of each demands and given valid reasons for dropping the demands. We have examined the various issues where the demands have been dropped. The findings in respect of each demand dropped is as under: 8.1. On Refundable Security Deposit The deposits collected by the club or association from its members at the time of admission are in the nature of interest-free refundable security deposits, which are intended as a safeguard for the use of various facilities and amenities provided by the club. These deposits are refundable upon the expiry or termination of the membership agreement and are not linked to the provision of any specific service. As per Section 67 of the Finance Act, 1994, service tax is levied on the gross amount charged as consideration for a service provided or to be provided. Since these deposits are refundable and do not constitute consideration for any service, they fall outside the scope of service tax. This position is further clarified by the CBEC in its Educa....
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....duly paid either upon billing or receipt-whichever is earlier. The SCN, however, inconsistently includes closing balances in some years and billed amounts in others, ignoring the correct accounting treatment. This leads to duplicative inclusion of amounts under multiple heads, despite such amounts already being taxed once. Accordingly, we find that the Ld. adjudicating authority has rightly dropped this demand. 8.4. Misc. Income - Sale of Liquor Bottle, Cartoon The miscellaneous income disclosed by the appellant-assessee includes proceeds from the sale of scrap, primarily consisting of used liquor bottles. Since the sale of scrap bottles constitutes a transaction in goods, it does not fall within the ambit of service as defined under the Finance Act, 1994. Thus, no service tax liability arises on such sales. Accordingly, we find that the Ld. adjudicating authority has rightly dropped this demand. 8.5. Service Tax charged on opening balance of Sundry Debtor instead of amount received during the year The Show Cause Notice (SCN) proposes service tax on the differential amount between the opening and closing balance of sundry debtors as per the balance sheet. The appellant-....