TMI Blog2022 (12) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Therefore, the ratio of Calcutta Club Ltd. squarely applies to this case. Hence, the demand under this head cannot be sustained. Intellectual Property Rights Service - it is submitted that the demands under this head on the appellants pertain to the period 1.4.2007 to 31.3.2010 when intellectual property rights service was taxable but copyrights were specifically excluded from the purview of IPR by law - HELD THAT:- On perusal of the agreements in question, we find that the appellants gave the service recipients the right to print or telecast or make copies of the Yoga programmes which they produced. In one agreement, the programmes were also being translated into Russian and telecast to Russia and CIS countries (countries which were part of the former Soviet Union). Evidently, the appellants allowed their copyrighted materials to be used for a consideration. The demand of duty is under the head IPR services chargeable under section 65(105)(zzr) - 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l amounts of service tax under two heads, we have also found that the demands themselves are not sustainable. Therefore, we find this a fit case to invoke section 80 and set aside the penalties under section 76 and 77 - the impugned order needs to be set aside to the extent it levies service tax on the appellant under the heads Club and Association Service, Intellectual property Rights service, Transport of goods by road service, and Development and supply of content service. The demand under the heads Renting of immovable property service and Health club and Fitness service is upheld along with applicable interest. All penalties are set aside by invoking section 80 of the Finance Act, 1994. Appeal allowed in part. - SERVICE TAX APPEAL NO. 53183-53186 OF 2014 - FINAL ORDER NOS. 51213-51216 /2022 - Dated:- 23-12-2022 - MR DILIP GUPTA, PRESIDENT AND MR P. V SUBBA RAO, MEMBER (TECHNICAL) Shri B.L.Narasimhan Ms. Purvi Asati, Advocate for the Appellant Shri Harshvardhan, Authorized Representative of the Respondent ORDER These four appeals assail the same order in original [ Impugned order ] dated 25.2.2014 passed by the Commissioner of Central Goods and Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants submits that they are not contesting the demand under Renting of Immovable Property Service and have paid the entire demand along with interest. He also submits that they are not contesting the demand under Health club and Fitness Centre Service . We proceed to examine the demands under each of the remaining four heads. Club or Association Service [Section 65(105) (zzze)] 5. The demand under this head was made only against M/s. Divya Yog Mandir Trust, the appellant in appeal ST/51383/2014. The appellant received contributions from its members which are relatable to various privileges which the members enjoy. The case of the Revenue is that such contributions are chargeable to service tax at the hands of this appellant under the head Club or Association Service under Section 65(105(zzze) read with section 65(25aa). Learned counsel for the appellant submits that the services rendered by a club to its members is self-service and is not chargeable to service tax under Club or Association Service. He relies on the judgment of the Supreme Court in State of West Bengal vs. Calcutta Club Ltd. [ 2019(29)GSTL545(SC) ] and asserts that the case of the appellant is squa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blished or constituted by or under any law for the time being in force, is not included. Shri Dhruv Agarwal laid great emphasis on the judgments in DALCO Engineering Private Limited v. Satish Prabhakar Padhye and Ors. Etc., (2010) 4 SCC 378 (in particular paragraphs 10, 14 and 32 thereof) and CIT, Kanpur and Anr. v. Canara Bank, (2018) 9 SCC 322 (in particular paragraphs 12 and 17 therein), to the effect that a company incorporated under the Companies Act cannot be said to be established by that Act. What is missed, however, is the fact that a Company incorporated under the Companies Act or a cooperative society registered as a cooperative society under a State Act can certainly be said to be constituted under any law for the time being in force. In R.C. Mitter Sons, Calcutta v. CIT, West Bengal, Calcutta, (1959) Supp. 2 SCR 641, this Court had occasion to construe what is meant by constituted under an instrument of partnership, which words occurred in Section 26A of the Income Tax Act, 1922. The Court held : The word constituted does not necessarily mean created or set up , though it may mean that also. It also includes the idea of clothing the agreement in a leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax under this head have been confirmed against Divya Yog Mandir Trust, Divya Yog Sadhna and Divya Yog Sandesh. Learned counsel for the appellant submits that the demands of service tax under this head were confirmed on the amounts received by the appellants under the following agreements: a) An agreement with M/s. Geminin Overseas Ltd. for telecasting the programme in Russian language; b) Agreement with M/s. Diamond Comics, Delhi for grant of exclusive rights to print, publish and distribute the monthly publication YOG SANDESH ; and c) Agreement with M/s Garg Enterprises and M/s. GTC Infomedia Pvt. Ltd. for exclusive/sole marketing agent and grant of rights to manufacture, copy and print VCDs and DVDs, etc. 11. Learned counsel submits that the demands under this head on the appellants pertain to the period 1.4.2007 to 31.3.2010 when intellectual property rights service was taxable but copyrights were specifically excluded from the purview of IPR by law. He submits that subsequently, from 1.4.2010, a separate taxable head of copyrights service was introduced under section 65(105)(zzzzt). 12. On perusal of the agreements in question, we find that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transport of goods by road and issues consignment notes. He submits that issue of consignment notes is essential to attract service tax under this head and no consignment notes have been issued in respect of the services on which tax is demanded from the appellants. He relies on the following case laws: (a) Bharat Swabhiman (Nyas) vs. Commissioner, Dehradun [ 2022 (1) TMI 1127 -CESTAT NEW DELHI] (b) Bhoramdeo Sahakari Shakhar Utpadam Karkhana vs. Commissioner of Customs, Central Excise Service Tax, Raipur [ 2019 (10) TMI 1416-CESTAT NEW DELHI] (c) Doddanavar Brothers vs. CC, CE ST-Belgaum, [ 2020 (1) TMI 590-CESTAT BANGALORE] (d) Rohan Motors Ltd. vs. CCE, Meerut-I, [ 2018 (7) TMI 29-CESTAT NEW DELHI] 16. As an alternative submission, learned counsel states that in some cases, the transporter had already paid service tax and collected it from the appellants and the demands need to be recomputed after reckoning such amounts. 17. Learned authorised representative supports the impugned order but does not dispute that there is no evidence of any consignment notes being issued in respect of the amounts paid by the appellants towards tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able, there must be a service provider and a service recipient and a consideration to levy service tax. There is no charge of service tax on sharing of revenues in any joint venture between two entities or persons. PENALTIES 21. As far as the penalties are concerned, penalty under section 78 is imposable only when the service tax is not paid or short paid by reason of fraud or collusion or willful misstatement or suppression of facts. Penalty under section 76 is imposable in other cases. Penalty under section 77 is imposable for offences not covered under any other section. Further, as per section 80, no penalty is imposable under section 76 or section 77 if there is a reasonable cause for failure to pay service tax. Sections 76, 77, 78 and 80 are reproduced below: SECTION 76. Penalty for failure to pay service tax. - Any person, liable to pay service tax in accordance with the provisions of section 68 or the rules made under this Chapter, who fails to pay such tax, shall pay, in addition to such tax and the interest on that tax in accordance with the provisions of section 75, a penalty which shall not be less than one hundred rupees for every day during which such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e there under for which no penalty is separately provided in this Chapter, shall be liable to a penalty which may extend to ten thousand rupees. SECTION 78. Penalty for failure to pay service tax for reasons of fraud, etc. - (1) Where any service tax has not been levied or paid, or has been short-levied or short-paid, or erroneously refunded, by reason of- fraud or collusion or willful misstatement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with the intent to evade payment of service tax, the person, liable to pay such service tax or erroneous refund, as determined under sub-section (2) of section 73, shall also be liable to pay a penalty, in addition to such service tax and interest thereon, if any, payable by him, which shall be equal to the amount of service tax so not levied or paid or short-levied or short-paid or erroneously refunded. Provided that where true and complete details of the transactions are available in the specified records, penalty shall be reduced to fifty per cent of the service tax so not levied or paid or short-levied or short-paid or erroneously refunded. Provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee proves that there was reasonable cause for the said failure. (2) Notwithstanding anything contained in the provisions of section 76 or section 77 or section 78, no penalty shall be imposable for failure to pay service tax payable, as on the 6th day of March, 2012, on the taxable service referred to in sub-clause (zzzz) of clause (105) of section 65, subject to the condition that the amount of service tax along with interest is paid in full within a period of six months from the date on which the Finance Bill, 2012 receives the assent of the President. 22. In this case, we do not find any evidence to substantiate the elements required to levy penalty under section 78. Therefore, only Section 76 would apply. Except for small amounts of service tax under two heads, we have also found that the demands themselves are not sustainable. Therefore, we find this a fit case to invoke section 80 and set aside the penalties under section 76 and 77. 23. In view of the above, we find that the impugned order needs to be set aside to the extent it levies service tax on the appellant under the heads Club and Association Service , Intellectual property Rights service , Transp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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