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2015 (9) TMI 1389 - AT - Service TaxRefund claim - Unjust enrichment - cum-tax computation - deposit of tax which was not leviable - Service tax was paid as Clubs or associations service on amounts collected as entrance fee for admission of new members - Held that:- Mere capacity to deliver a service cannot be equated with providing or agreeing to provide a service; such service has to reach the recipient in exchange for the consideration or the consideration is made over in exchange for a schedule of delivery of the service. In a combined human activity, contribution of, or agreement to contribute, funds cannot, therefore, be construed as consideration to be taxed under Finance Act, 1994 unless attributable to an activity or performance or promise thereof on the part of an identified provider to an identified recipient. Unless the existence of provision of a service can be established, the question of taxing an attendant monetary transactions will not arise. Contributions for the discharge of liabilities or for meeting common expenses of a group of persons aggregating for identified common objectives will not meet the criteria of taxation under Finance Act, 1994 in the absence of identifiable service that benefits an identified individual or individuals who make the contribution in return for the benefit so derived. Tax was paid on the entrance fee without collecting the tax amount from the new members. Though the first appellate authority has granted the benefit of a cum-tax computation of the entrance fee, it must be borne in mind that the tax liability was discharged before the re-computation allowed in the impugned order. It, therefore, does not alter the origin of the funds utilized for discharge of tax liability - viz. from the common funds of the appellant without recourse to the members who paid nothing more than the entrance fee. Moreover, entrance fees are fixed in the bye-laws without reference to tax leviable, if any, thereon. For both these reasons, it can be concluded that tax burden has not been transferred to the members from whom entrance fees were collected. Clearly, the service tax so paid does not carry the taint of unjust enrichment. - Decided in favour of assessee.
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