TMI Blog2014 (2) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... red with Service Tax nor did they discharged their Service Tax liability at all. The act of non-observance of rules tantamount to contravention of the stipulation made under Service Tax law with intent to evade payment of Service Tax - demand confirmed invoking extended period of limitation. - Order-in-Appeal No. 228/S.Tax/D-II/2012 - - - Dated:- 3-12-2012 - Shri S.R. Baruah, Commissioner (Appeals) Shri Vijai Kumar, Advocate and S.K. Guha, Administrative Officer, for the Appellant. ORDER The present appeal has been filed by M/s. Federation of Indian Micro and Small Medium Enterprises. B-4/161, Safdarjung Enclave, New Delhi - 110 029 (hereinafter referred to as the appellants ) in respect of Order-in-Original No. 59/DCM/DN-II/2011, dated 30-11-2011 passed by the Joint Commissioner, Service Tax, Delhi where a demand of Service Tax amounting to Rs. 21,68,454/- has been confirmed with interest and penalty of equal amount has been imposed under Section 78 of the Finance Act, 1994 (hereinafter referred to as the Act ) and further penalty of Rs. 1,000/- under Section 77 of the Act, ibid. 2. Briefly stated facts of the case are that the appellants were founded in 1995 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or advantages for a subscription or any other amount. The following four categories are not covered to be club or association : (i) Any body established or constituted by or under any law for the time being in force; or (ii) Any person or body of persons engaged in the activities of trade unions, promotion of agriculture, horticulture or animal husbandry, or (iii) Any person or body of persons engaged in any activity having objectives which are in the nature of public service and are of a charitable, religious or political nature; or (iv) Any person or body of persons associated with press or media. In view of the above, club or association means any person or body of persons providing (i) services; or (ii) facilities; or (iii) advantages, for a subscription or any other amount to its members. Subscription includes (i) membership fee; or (ii) recurring subscription fee; or (iii) additional fee; or (iv) life membership fee and any other amount includes (i) amounts paid for provisions of services to the guests of a member; or (ii) amount paid for get-together; or (iii) amount paid for functions charged over and above the subscription amount. The appellants do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are representing some industry or commerce and the appellants are not representing any particular industry or commerce and that the Government had identified certain associations representing various Industries or Commerce vide Notification No. 16/2009-S.T., dated 7-7-2009 but the name of the appellants did not figure therein hence the benefit of Section 96J was not available. The appellants submit that the Notification No. 16/2009-S.T. exemption the associations mentioned therein from levy of Service Tax on club or association services during the period 7-7-2009 to 31-3-2010 whereas Section 96J of the Act is applicable for the period 16-6-2005 to 31-3-2008. Moreover, Notification No. 16/2009-S.T. does not restrict any exemption to any other association except the ones listed in that notification and hence the demand confirmed is liable to be set aside. The legal position on this issue has already been settled by CESTAT in the case of Ahmedabad Management Association v. CST - 2009 (14) S.T.R. 171 (Tri.-Ahmd.). Further, CESTAT in the case of Dehradun Club Limited v. CCE - 2007 (7) S.T.R. 519 (Tri.-Del.) observed that in case of a club in which every member is shareholder and club ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been raised and confirmed by invoking proviso to Section 73(1) of the Act. It is submitted that in the facts and circumstances of the case, the extended period of limitation for issuing demands cannot be invoked for the reason that the appellants have not committed any fraud, collusion, wilful misstatement or suppression of facts or contravention of any of the provisions with an intent to evade payment of Service Tax. The appellants were under the bona fide belief that they were not liable to pay Service Tax under the category of Club or Association service. The legal position on this has been settled by the Apex Court in the case of Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) where it has been held that mere failure or negligence on the part of the manufacturer in not taking out a licence and in not paying duty does not attract the extended period of limitation. Reliance in this regard is also placed on the judgment of Hon ble Supreme Court in the case of Jaiprakash Industries Ltd. v. CCE - 2002 (146) E.L.T. 481 (S.C.) and CCE v. Chemphar Drugs Liniments - 1989 (40) E.L.T. 276 (S.C.). In view of the above, it is submitted that extended period is not invokable in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants was on account of activities that were covered under the definition of Club and Association Services, chargeable to Service Tax at the applicable rate. The appellants have contended that they are not liable to pay Service Tax for the reasons narrated in their grounds of appeal. I find that the period involved in the show cause notice is from 16-6-2005 to 31-3-2010. The following are the factors of income on which Service Tax has been demanded : Income Head Amount (Rs.) Membership fee 28,37,264/- Fee from other services (received for providing certificate of origin) 1,71,88.890/- Fee charged for coordinating participation in the US fair 20,000/- Project Income 10,57,517/-. 5.1 For income of Rs. 28,37,264/-, the appellants have contended that they represent all the Micro, Small Medium Enterprises before various authorities and to meet their expenses, small amount is collected from the members; that the contribution is made by 330 members but the work is done for the cause of more than a lakh enterprises and hence the activity cannot be termed as service provided to 330 members, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce and also advantages for their members for which they are collecting some amount and hence I find that they fulfil all the factors of the classification of Club and Association Service. The appellants have contended that while they collect subscription/contribution from only 330 members whereas the benefits of their activities are catered to the lakhs of people. Here I note that the appellants themselves have stated that their members are various organizations and members from trade and industry. I note that such organizations and members from trade and industry also represent their respective members and for the benefits of the services provided by the appellants, they are the via-media between the ultimate trade industry and the appellants. Moreover, the definition of Club or Association Service refers to the service provided primarily to its members . The word primarily to members does not restrict any service provider to render services to any non-member or any other person, who is not their member directly but the benefits of the services rendered reach such other person indirectly, as is in the present case. Provision of service to non-members has also been admittedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cide the matter in view of the introduction of Section 96J to the Finance Act, 1994 through Finance Act, 2011 reported as 2012 (26) S.T.R. 558 (Tri.-Del.), where the Hon ble CESTAT has held as under : 3. An amount of Service Tax of Rs. 43.68 lakhs stands confirmed against the applicant on the ground that the said membership fee collected from the Members is liable to Service Tax under the category of Club and Association Service . Learned Advocate submits that after passing of the impugned order, the provision of Section 96J were introduced in the Finance Act, 1994 by Finance Act, 2011. Vide the said section, the membership collected by a club or association formed for representing industry or commerce was held to be non-taxable during the period on and from the 16-6-2005 to 31-3-2008. Inasmuch as the period involved in the present appeal falls within the above period, learned Advocate submits that the Service Tax was not liable to be taxed in view of the above retrospective exemption to the same. 4. After hearing learned SDR, we find that admittedly newly introduced provisions of Section 96J were not before the Commissioner at the time of passing of the impugned order, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation Service and hence the demand confirmed is liable to be set aside. Here I note that the said C.B.E. C. Circular dated 19-8-2011 clarifies as under : Board has received representations seeking clarification as to whether Service Tax is leviable on the fee charged by the Chambers of Commerce for issuance of COOC. 2. These representations have been examined. Service provided by a Chamber of Commerce by way of issuance of COOC appears to fall under two different headings, namely, club or association service [Finance Act, 1994, Section 65(105)(zzze)], or technical inspection or certification service [Finance Act, 1994, section 65(105)(zzi)]. It is well known that in our country, Chambers of Commerce, Export Promotion Councils (EPC), some Trade Associations have been authorised by the Government to issue COOC to the exporters. General practice followed is that the exporter makes an application to the Chamber or any authorised agency for issuance of COOC, in the prescribed form, along with a copy of commercial invoice and other documents and pays the prescribed fees. On the basis and verification of the information provided in the application for COOC and the supporting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to UNCTAD shown as project income are the services provided to United Nations Organization and exempted from levy of Service Tax in terms of the notification cited supra. Here I note that the adjudicating authority, while discussing the issue relating to demand of Service Tax on the income shown as Project Income, at Para 20.4 of the impugned order has held as under : 20.4 With regard to Project Income, M/s. FISME have contended that in terms of Notification No. 16/2002-S.T., dated 2-8-2002, all the taxable services specified in Section 65 of the said Act provided by any person, to the United Nations or an International Organization are exempted from the levy of whole of the Service Tax. The services provided by FISME to UNCTAD shown as Project Income in the show cause notice are the services provided to the United Nations Organization and exempted from the levy of Service Tax. A careful study of the Notification No. 16/2002-S.T., dated 2-8-2002 shows that an Explanation to the above Notification has been attached which reads as under : Explanation. - For the purposes of this notification, International Organization means an international organization declared by the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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