Custom, Excise & Service Tax Tribunal
M/S Enchanted Woods Club Ltd vs Cce, Ludhiana on 9 May, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. I DATE OF HEARING : 09/05/2014. Service Tax Appeal No. 263 of 2008 [Arising out of the Order-in-Original No. 65/Ldh/2007 dated 25/02/2008 passed by The Commissioner, Central Excise, Ludhiana.] For Approval and signature : Honble Shri Justice G. Raghuram, President Honble Shri Rakesh Kumar, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s Enchanted Woods Club Ltd. Appellant Versus CCE, Ludhiana Respondent
Appearance Shri Piyush Kumar, Advocate for the appellant.
Shri Amresh Jain, Authorized Representative (DR) for the Respondent.
CORAM : Honble Shri Justice G. Raghuram, President Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 52147/2014 Dated : 09/05/2014 Per. Justice G. Raghuram :-
We have heard the learned counsel for the appellant and learned DR for the respondent/Revenue Shri Amresh Jain.
2. Appeal is preferred against the adjudication order dated 25/02/08 passed by the learned Commissioner, Central Excise, Ludhiana confirming service tax demand of Rs. 70,47,618/- apart from interest and penalties as specified, for having provided Club or Association service, defined in Section 65 (25a) readwith Section 65 (105) (zzze) of the Finance Act, 1994 (Act).
3. On the undisputed factual scenario, the appellant provided several services generically falling within the ambit of Club or Association service to its members during the period 01/04/05 to 15/06/05 and 16/06/05 to 31/10/05. Appellant received Rs. 4,78,08,582/- and Rs. 97,70,000/- as Membership fee during the two periods in issue.
4. Proceedings were initiated by show cause notice dated 09/11/06 invoking the extended period of limitation under the proviso to Section 73 (1) of the Act, alleging rendition of the taxable service; failure to obtain registration, to file returns periodically and to remit service tax due under the provisions of the Act.
5. The appellant resisted initiation of proceedings inter-alia claiming that since the services provided to its members by the appellant are covered by the principle of mutuality and would not amount to rendition of a taxable service by one person to another, there would be no liability to service tax. The contention was rejected and the proposed demand confirmed by the impugned adjudication order.
6. In light of the judgment of Jharkhand High Court in Ranchi Club Ltd. vs. CCE & ST, Ranchi Zone reported in 2012 (26) S.T.R. 401 (Jhar.) and of the Gujarat High Court in Sports Club of Gujarat Ltd. vs. Union of India reported in 2013 (31) S.T.R. 645 (Guj.), both of which had followed the judgment of the Supreme Court in Joint Commercial Tax Officer, Harbour Division, II Madras vs. The Yong Mens Indian Association reported in 1970 (1) SCC 462, the position is no longer res-integra. The services provided by a club to its members is covered by the principle of mutuality and would not amount of rendition of service by one person to another and therefore would not amount to a taxable service.
7. On the aforesaid analysis, the impugned order is unsustainable and is quashed. There shall however be no order as costs. The appeal is allowed.
(Dictated and pronounced in open court) (Justice G. Raghuram) President (Rakesh Kumar) Member (Technical) PK ??
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