Service Tax
TRT-2025-
Cestat New Delhi
Date:-23-12-22
In:-
Issue Favourable to Tax Payer ?:-
Order date – 23 December 2022
Facts –
- The Appellants, M/s Divya Yoga Mandir Trust and others, was issued with a show cause notice dated 19.10.2012 demanding service tax on Club or Association Service, Intellectual Property Rights Service, Transport of Goods by Road Service, and Development and Supply of Contents Service.
Issue –
- Whether the appellants are liable to pay service tax along with interest and penalty on such services?
Order –
- The Tribunal held that the appellant is registered as a trust under the Indian Trusts Act. Relying on the decision of the Supreme Court in Calcutta Club Ltd., it was held that companies and co-operative societies which are registered under the respective Acts can be said to have been constituted under those laws and therefore, get excluded from the definition of club or association under section 65(25a) and consequently, any service rendered by them will not be exigible to service tax under section 65(105)(zzze). Hence, the demand under this head cannot be sustained.
- The Tribunal held that an intellectual property service will be rendered if the IPR is either transferred temporarily or its use or enjoyment is permitted. The scope of the IPR in the service tax law specifically excludes copyrights. Therefore, the amounts earned under the agreements by the appellants are clearly excluded from the scope of the taxing statute for IPR service. The demands under this head cannot, therefore, be sustained.
- The Tribunal held that if no consignment notes are issued, the service provider is not covered by section 65(50b) and consequently, any services rendered by such a service provider are not exigible to service tax. It was found that no evidence on record to the effect that consignment notes have been issued. Therefore, the demand under this head is not sustainable and needs to be set aside.
- The Tribunal held that in the absence of any service provider-service recipient relationship, there can be no service tax because service tax is chargeable on taxable services provided. The relationship between the appellant and Rajashri is not one of service provider-service recipient but one of partners in a joint venture in which each contributed something to the project and shared the Revenue earned. There is no charge of service tax on sharing of revenues in any joint venture between two entities or persons.
- In this case, it was not found any evidence to substantiate the elements required to levy penalty under section 78 also finds this fit case to invoke section 80 and set aside the penalties under section 76 and 77.
- Hence the demands under these head and penalties are set aside.
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