SIAM not liable to Pay Service Tax on Auto-Expos if Tax has been paid by Organizers: CESTAT [Read Order]

The Delhi bench of Customs Excise and Service Tax  Appellate Tribunal (CESTAT) in Society of Indian Automobile Manufactures v.CST Delhi, held that no Service Tax shall be charged on SIAM for the revenue earned through the auto expo, as the same has already been paid by The Confederation of Indian Industry(CII).The demand for service tax on the sale of statistical data was also held unsustainable.

The Appellants (Assessee), Society of Indian Automobile Manufacturers(SIAM), was slapped with Service Tax under two categories : (i) service under Club and Association (including the sale of statistical data to the Members of appellant association) ; (ii) under Business Exhibition Services. Aggrieved by the order of adjudicating authority (CCE) the appellants filed the appeal before the CESTAT.

The Revenue Department stated that the appellant has not discharged his service tax liability with regard to Business Exhibition Services on the entire amount received by them from the exhibitions. The appellants contended that they had entered into a MoU with Confederation of Indian Industry (CII), according to which CII will organize the auto exhibition on behalf of the appellant and all the legal formalities including payment of the service tax will be done by M/s CII. After exhibition, the Revenue received from such auto exhibition will be shared between the appellant and M/s CII by an agreed formula of revenue sharing.

The CESTAT observed that no service tax can be levied on SIAM under club and association category  on two grounds. Firstly , for the period before 31/03/2008, the new section 96J of Finance Act Exempts the service of clubs and associations from payment of Service Tax on the membership charges collected by such associations and secondly there has been a number of judicial pronouncements supporting the same.The CESTATH quoted the decision of  Hon’ble High Court of Gujarat in the case of Sports Club of Gujarat Ltd. vs. Union of India –[2010 (20) S.T.R. 17 (Guj.)], in which it was held that,” for the applicability of service tax, there should be existence of two sides/entities, viz. transaction as against consideration. In a members-club there is no question of two sides. “Members” and “Club” both are the same entity. One may be called as “principal” when the other may be called as “agent”. Therefore, such transaction, in between themselves, cannot be recorded as income, sale or service”.