Custom, Excise & Service Tax Tribunal
Rajpath Club Limited vs Service Tax - Ahmedabad on 13 September, 2022
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Service Tax Appeal No.37 of 2012
(Arising out of OIA-269/2011/STC/KANPAZHAKAN/COMMR-A-/AHD dated 14/10/2011
passed by Commissioner of Service Tax-SERVICE TAX - AHMEDABAD)
Rajpath Club Limited ........Appellant
S G Highway, Ahmedabad, Gujarat
VERSUS
C.S.T.-Service Tax - Ahmedabad .......Respondent
7 th Floor, Central Excise Bhawan, Nr. Polytechnic CENTRAL EXCISE BHAVAN, AMBAWADI, AHMEDABAD, GUJARAT-380015 APPEARANCE:
Shri Bishan Shah & Ms. Kiran Tahelani, Chartered Accountant for the Appellant Shri J A Patel, Superintendent (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU Final Order No. A/ 11124 /2022 DATE OF HEARING: 30.08.2022 DATE OF DECISION: 13.09.2022 RAMESH NAIR The brief facts of the case are that the appellant entered into a contract with M/s. Ahura Restaurants Pvt Ltd since 2003 and with M/s. Bhagwati Banquets & Hotels Ltd since 13.02.2007 to run the canteens inside the club premises on contract basis. As per these contracts, for running the business of canteen, the caterers are allowed to use the fully equipped kitchen along with all the machines and equipments, the Cascade restaurant, splash coffee shop, food court, new glass restaurant, the banquet hall, the fountain lawn party area, the Portrico, children park party, etc along with all the facilities like the air conditioning, electrical installations, music systems, fans, lights and other fittings. The club also provides the caterer with crockery, cutlery, service ware, linen and kitchen utensils and banqueting materials. The club retained 10% of the basic food and beverage bill amount and additional 4% when the sale exceeded Rs. 1 Crore per annum of the caterer (M/s. Ahura Restaurants Pvt Ltd) and retained 13% in the first year and thereafter 14% for the remaining period of the basic food and beverage
2|Page ST/37/2012 bill of M/s. Bhagwati banquets & Hotels Ltd towards the use of premises, electricity, water and maintenance.
1.1 The case of the department is that the club provided infrastructural support services to the said two caterers for running their catering business inside the club premises, accordingly they are liable to service tax on the income earned from services provided to these caterers.
02. Shri Bishan Shah with Ms. Kiran Tahelani, learned chartered accountant appearing on behalf of the appellant at the outset submits that on the issue of taxability of Membership of Club or Association Service, the same is settled by the larger bench of Hon'ble Supreme Court in the case of STATE OF WEST BENGAL VS. CALCUTTA CLUB LTD.- 2019-TIOL-449-SC-ST-
LB. He submits that the appellant was also one of the litigant before the Hon'ble Supreme Court. He submits that as per the Hon'ble Supreme Court judgment the present liability of service tax is not sustainable.
03. Shri J A Patel, learned Superintendent (AR) appearing on behalf of the revenue reiterates the finding of the impugned order. He emphatically submits that the judgment of Hon'ble Supreme Court is on the mixed issue of law and facts. He further submits that while passing the adjudication order, the judgment of Hon'ble Supreme Court was not available therefore, he seeks the remand of the matter to re-consider in the light of the Hon'ble Supreme Court judgment.
04. We have carefully considered the submissions made by both the sides and perused the records. We find that the issue related to taxability of Club Membership was under litigation before various forums. Finally, the hon'ble Supreme court in the case of CALCUTTA CLUB LTD (supra) the larger bench has decided the issue. We are of the view that though the issue is settled as per the Hon'ble Supreme Court judgment, each case has to be re-considered applying the judgment of the hon'ble Supreme Court viz-a-viz the facts of each case.
4.1 Therefore, in our considered view the present issue needs to be reconsidered by the adjudicating authority on the basis of the law laid down by the Hon'ble Supreme Court vis-à-vis facts of each case therefore, we set aside the impugned order and remand the matter to the adjudicating authority for passing a fresh order. All the issues are kept open. Since the appeal pertains to the period 2012 and the period involved is 2006-07 to
3|Page ST/37/2012 2007-08, the adjudicating authority is expected to pass a denovo order within a period of two months from the date of this order.
05. The appeal is allowed by way of remand to the adjudicating authority.
(Pronounced in the open court on 13.09.2022) (RAMESH NAIR) MEMBER (JUDICIAL) (RAJU) MEMBER (TECHNICAL) Mehul