The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the service tax demand of approximately 4.94 crores on yoga teaching services rendered by the Patanjali trust for the period from 01.04.2007 to 31.03.2011 due to the violation of section 68 of the Finance Act,1994.
Patanjali Yogpeeth Trust, the appellant assessee was engaged in the activity of providing services relating to health and fitness by way of teaching yoga and meditation, and the assessee’s trust working under the aegis of Baba Ramdev and Acharya Balkrishna are inter-alia engaged in providing Yoga training to various residential and non-residential camps.
For participation in such camps, a charge of participation fees from the participants on the name of the donation was taken and this amount was collected at donation but it was fees for providing the services and hence covered under the definition of consideration.
The assessee appealed against the order passed by the Commissioner of Customs and Central Excise for confirming the service tax demand, especially for the period from 01.04.2007 to 31.03.2011, and the penalty on the activities of yoga service rendered by the assessee.
Atul Gupta and Prakhar Shukla, the counsels for the assessee contended the amount received as donation was charity and such amount form consideration for providing any health and fitness service.
Also submitted that the services rendered by the assessee were taxable and liable to pay service tax by the assessee.
Sarweshwar T. Khairnar, the counsel for the department relied on the decisions made by the lower authorities and contended that the demand and penalty raised by the revenue were as per the law and liable to be sustained.
The Bench observed that the non-payment of service tax on the services was a deliberate, conscious attempt to suppress the material fact of receipt of consideration against services rendered by the assessee to avoid payment of due service tax as envisaged under Section 68 of the Finance Act in utter disregard of Law.
The two-member bench comprising Choudhary (Judicial) and Sanjiv Srivastava (Technical) held that as the definition of the above-said service includes the activity of Yoga as a taxable service, the assessee was liable to pay the service tax amounting to Rs.4,94,33,027/- (Four Crore Ninety-Four Lac Thirty-Three Thousand and Twenty-Seven Only) in respect of services of health and fitness rendered by them during the period from 01.10.2006 to 31.03.2011.
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