By TIOL News Service

MUMBAI, NOV 17, 2015: THE appellant is Maharashtra Chamber of Housing Industry. They organized an exhibition during October 2004 to December 2004 and charged an amount as fees from their members as well as non-members. Revenue authorities are of the view that the appellant is liable to discharge service tax under BAS on the amounts collected by them.

Demand notice was issued and the same was confirmed along with imposition of penalties and interest.

On appeal, the Commissioner(A) confirmed the service tax liability along with interest but set aside the penalties on the ground that the appellant has paid the service tax liability and there is no malafideintention.

Before the CESTAT, the appellant submitted that the demand is time barred as the SCNis issued on 23.08.2006. On merits, it is the submission that the amount collected from the members is not taxable as per the decision in the case of Karnavati Club Ltd. & Ranchi Club Ltd. - 2012-TIOL-1031-HC-JHARKHAND-ST.

The AR submitted that the appellant had never raised the question of limitation before the lower authorities & in fact before the first appellate authority they had sought closure of the entire issue relying upon the provisions of Section 73(3) of the Finance Act, 1994.

The Bench observed -

Merits:

"6. …We find that there is no dispute as to the fact that the appellant is covered under the service tax liability of Business Auxiliary Service during the relevant period.

6.1 It is also not disputed that the appellant has received an amount from the members of the association as well as from non-members. We find strong force in the contention raised by the learned Counsel as regards the service tax liability on the amount received from the members, no tax liability arises and is covered by the judgement of Honble High Court of Gujarat in the case of Karnavati Club Ltd (supra) and by the Honble High Court of Jharkhand in the case of Ranchi Club Ltd. (supra). To that extent we hold that the appeal needs to be allowed and the impugned order needs to be set aside and we do so. Consequently the liability of interest and penalty also needs to be set aside; as the appellant is an association of Housing Industry and conducts various exhibitions for benefit of builders etc. who are members.

6.2 As regards the demand raised on the amount received by the appellant from the non-members we find that the service tax liability does arise. On a specific query from the Bench, the learned C.A. draws our attention to the fact that service tax liability on the amount received is Rs.4,18,506/- which is annexed at page 217 of the appeal memo. We uphold the demand of Rs.4,18,506/- as also the interest thereof, however, as the issue involved in this case of taxability during the period when the tax was introduced on the services, by invoking provisions of Section 80 of Finance Act, 1994, we set as ide penalty levied under various Sections in the order-in-original and upheld by impugned order."

Limitation:

"6.3 …, we find that since the question of limitation was not raised before both the lower authorities, we hold that the same cannot be gone into by us in the 2nd appeal proceedings, in this case."

The appeal was disposed of.

(See 2015-TIOL-2433-CESTAT-MUM)