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2018 (10) TMI 35 - AT - Service TaxClassification of services - Club/Association Service or not - holiday resorts - case of the appellant is that there will be an agreement with its members who would be availing ‘time share’ facilities at the appellant’s resorts at various places and it is, according to the appellant, essentially in the nature of providing short term residential accommodation within the meaning of Section 65(105)(zzzzw) w.e.f. 01.05.2011. Applicability of Notification No. 04/2006-ST - Held that:- There is no difference between a member being upfront and a member availing instalment facility and there is no finding from the lower authority that the benefits of membership accruing to either of the aforesaid members vary. We thus find that the interest on instalments is only a financial arrangement for the deferred payment which is only to set-off any financial loss on account of deferred payment and that this kind of interest is not a taxable entity under the tax net - the denial and the reason attributed for denying applicability of Notification No. 04/2006-ST is not sound and proper - The exclusion as provided under the said Notification is applicable irrespective of the category. This very Bench has considered a similar situation in the case of Karur Vysya Bank Ltd. Vs. Commissioner of Central Excise, Trichy [2015 (2) TMI 525 - CESTAT CHENNAI] held that interest on instalment is not includible as it cannot partake the character of consideration for the services provided - demand withheld. Securitization income - Held that:- An amount showed in the balance sheet could neither be an income nor a consideration nor a payment or the gross amount charged in terms of Section 67(a) and (c) and hence, it is nothing but a financial adjustment in the nature of book entry - Further, when a member cancels membership, there is nothing for the appellant to claim as receivable and hence, the same gets adjusted by this notional amount since there is nothing on record to suggest that the appellant received any amount towards cancellation fees. Hence, the securitization income is not liable under service tax. Rental Income - Held that:- The adjudicating authority/Commissioner (Appeals) records that the assessee-appellant has not submitted any document with regard to its claim that the rentals were collected only from non-members - appellant directed to furnish all such details that are relevant before the lower authority for the lower authority to arrive at a proper finding after appreciating such documents furnished by the appellant - appeal allowed by way of remand. Exchange Services - Held that:- The service of facilitation could be availed only by virtue of being a member and not if such person is an outsider. Hence, this activity tantamounts to an activity of service provided to a member under mutuality concept and hence, not taxable. Provision of service of telephone and fax - Held that:- Though we hold that the revenue from telephone and fax could not be equated to ‘any other amount’, we are of the considered view that the appellant should prove with supporting documents to establish that it has not collected anything over and above the actuals charged by the operator for facilitating such telephone and fax services, before the lower authority - matter on remand. Penalties - Held that:- The benefit of Section 80 of the Act could be extended for the reason that the appellant acted in a bona fide manner and there was reasonable cause for their failure to discharge service tax liability in the situations where it was otherwise required to - penalty set aside. Appeal allowed in part - part matter on remand.
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