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TMI Blog2022 (12) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... on the appellant to explain why service tax should not be demanded from them along with interest and why penalties should not be imposed. The Commissioner issued the impugned order confirming the demands against the four appellants under various heads as follows: Appellant/ Head of Service Club or Association Service Intellectual Property Rights Service Renting of Immovable Property Service Transport of Goods by Road Service Health Club and Fitness Centre Service Development and Supply of Contents Service Divya Yog Mandir Trust 1,41,68,987 81,576 15,21,942 14,601 60,172 16,045 Divya Yog Sadhna - 30,74,441 - 1,27,846 - - Divya Yog Prakashan - - - 3,65,642 - - Divya Yog Sandesh - 3,31,247 - 3670 - - Total 1,41,68,987 34,87,264 15,12,942 5,11,119 60,172 16,045 3. We have heard Shri B. L. Narasimhan, learned counsel for the appellant and Dr. Radhe Tallo, learned authorised representative for the Revenue and perused the records. 4. Of the six heads under which service tax was demanded, learned counsel for the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of agriculture, horticulture or animla husbandry; or (iii) Any person or body of persons engaged in any activity having objectives which are in the nature of public service and or of a charitable, religious or political nature; or (iv) An person or body of persons associated with press or media; 8. In Calcutta Club Ltd., the Supreme Court 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). Paragraphs 71 to 73 of this judgment are reproduced below: "71. With this background, it is important now to examine the Finance Act as it obtained, firstly from 16th June, 2005 uptil 1st July, 2012. 72. The definition of "club or association" contained in Section 65(25a) makes it plain that any person or body of persons providing services for a subscription or any other amount to its members would be within the tax net. However, what is of importance is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced to the form of a document. If we construe the word "constitute" in the larger sense, as indicated above, the difficulty in which the Learned Chief Justice of the Calcutta High Court found himself, would be obviated inasmuch as the section would take in cases both of firms coming into existence by virtue of written documents as also those which may have initially come into existence by oral agreements, but which had subsequently been constituted under written deeds." 73. It is, thus, clear that companies and cooperative societies which are registered under the respective Acts, can certainly be said to be constituted under those Acts. This being the case, we accept the argument on behalf of the respondents that incorporated clubs or associations or prior to 1st July, 2012 were not included in the Service Tax net." 9. In this case, it is undisputed that the appellant is registered as a trust under the Indian Trusts 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 [Section 65 (105)(zzr) read with section 65(55a) and section 65(55b)] 10.&nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to intangible property, namely, trade marks, designs, patents or any other similar intangible property, under any law for the time being in force, but does not include copyright; (55b) " intellectual property service" means- a) transferring temporarily; or b) permitting the use or enjoyment of, any intellectual property right. 14. Thus, 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. Transport of goods by road service 15. Demands under this head have been made against all the four appellants on the amounts paid by them as freight invoking Rule 2(1) (d) of the Service Tax Rules under reverse charge (under this Rule, the appellants as recipients of the service are liable to pay service tax). Learned counsel for the appellants submits that as per section 65(50b), goods transport agency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials of Divya Yog Mandir Trust. Learned counsel for the appellant submits that the appellant has not developed any content whatsoever for Rajashri Media Pvt. Ltd. As per the agreement, the appellant provided raw content to Rajashri Media who dubbed and developed the content and commercially exploited it. Of the Revenue so generated by which Rajashri Media Pvt. Ltd., the appellant got a share. Such a revenue share cannot be termed provision of development and supply of content service. Learned authorised representative supports the impugned order. 20. We have considered the submissions. Evidently, as per the agreement between the appellant and Rajashri, the appellant provided material which was developed into audio and video content by the latter and it was also commercially exploited. Part of the Revenue earned was shared by Rajashri with the appellant. Thus, 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. In the absence of any service provider-service recipient relationship, there can be no serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter or the rules made thereunder, shall be liable to a penalty which may extend to ten thousand rupees; (c) who fails to - (i) furnish information called by an officer in accordance with the provisions of this Chapter or rules made thereunder; or (ii) produce documents called for by a Central Excise Officer in accordance with the provisions of this Chapter or rules made thereunder; or (iii) appear before the Central Excise Officer, when issued with a summon for appearance to give evidence or to produce a document in an inquiry, shall be liable to a penalty which may extend to ten thousand rupees or two hundred rupees for everyday during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance; (d) who is required to pay tax electronically, through internet banking, fails to pay the tax electronically, shall be liable to a penalty which may extend to ten thousand rupees; (e) who issues invoice in accordance with the provisions of the Act or rules made thereunder, with incorrect or incomplete details or fails to account for an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be, the court, then, for the purpose of this section, the service tax as reduced or increased, as the case may be, shall be taken into account: Provided that in case where the service tax to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the second proviso to sub-section (1), shall be available, if the amount of service tax so increased, the interest payable thereon and twenty-five per cent of the consequential increase of penalty have also been paid within thirty days or ninety days, as the case may be, of communication of the order by which such increase in service tax takes effect: Provided further that if the penalty is payable under this section, the provisions of section 76 shall not apply. Explanation- For the removal of doubts, it is hereby declared that any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the second proviso to subsection (1) or the first proviso to sub-section (2) shall be sustained against the total amount due from such person. Section 80. Penalty not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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