Custom, Excise & Service Tax Tribunal
Arising Out Of 09-2010 Dated 09/04/2010 ... vs Commissioner Of Central Excise, ... on 26 June, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL:SOUTH ZONAL BENCH BANGALORE Final Order .21034 / 2014 Appeal(s) Involved: ST/1247/2010-DB [Arising out of 09-2010 dated 09/04/2010 passed by Commissioner of Central Excise , HYDERABAD-II ] COUNTRY CLUB (INDIA) LTD 8-2-703, SILVER OAK, AMRUTHA VALLEY, ROAD, NO.12, BANJARA HILLS, HYDERABAD. Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax HYDERABAD-II NULL L.B STADIUM ROAD, BASHEERBAGH, HYDERABAD, - 500004 ANDHRA PRADESH Respondent(s)
Appearance:
Ms.RUKMANI MENON, Advocate For the Appellant Shri Ganesh Haavanur, Addl. Commissioner(AR) For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 26/06/2014 Date of Decision: 26/06/2014 Order Per : B.S.V.MURTHY The issue involved is whether the amount recovered from the members who opt for membership (with land) towards cost of land and handed over to M/s. Amrutha Estates (according to appellants) has to be levied to service tax under club or association service or not.
2. The learned counsel submits that the very same issue had come up before this Tribunal for an earlier period and this Tribunal had remanded the matter to the original adjudicating authority with the following observations:-
7. It is undisputed that the appellant is offering a category of membership which is called Membership (with land) and charging a membership fee which includes the cost of the land. It is also undisputed that those individuals who had applied for the membership with land paying the membership fee were to be allotted land by their sister concern M/s. Amrutha Estates. It is seen form the records that the appellant has been contending before the lower authorities that the amount collected by them in the membership fee, towards the cost of the land, was transferred to their sister concern. The Adjudicating Authority has not recorded any factual finding on the issue. The entire case needs to be appreciated on the factual matrix inasmuch as the Boards circular dt. 27/7/2005, would indicate at para 10.5, that amount charged by the club to its members for sale of items such as food or beverages would not be taxable provided the documents evidencing such sales are available. This would indicate that the Club or Association was not required to include the cost of sale of items to the members for discharge of service tax liability. In the case in hand before us, it is undisputed that the membership fee (with land) collected by the appellant is towards the membership fee and towards the cost of the land. If it is the contention of the appellant that the cost of the land was transferred to their sister concern M/s. Amrutha Estates for allotting the plot to members who opted for such membership (with land), then these amounts need to be excluded from the gross value for levy of service tax. In our considered view, the plea of the appellant on this point merits consideration and also a finding needs to be recorded on the factual position of transfer of amounts to their sister concern, which needs to be verified from the books of account. We are unable to look into the matter at this juncture, since the factual matrix needs to be appreciated by the Adjudicating Authority. Considering the Boards directive regarding value to be considered for levy of service tax on Club or Association Services, we find that the appellants case is on a more stronger footing, if they are able to demonstrate that the amount on which the lower authorities are seeking service tax, has been actually transferred to their sister concern, then the Boards circular would apply and binding on the Revenue officers, as has been settled by the Honble Supreme Court in the case of CCE, Bolpur Vs. Ratan Melting & Wire Industries [2008(231) ELT 23(SC)].
3. As regards the issue as to whether cost of land is to be included or not, there is no dispute and both sides agree and we have also taken the same view in the earlier order referred to by the counsel which has not been appealed against, that the cost of land need not be included. According to the learned counsel, what was required in the order of the Tribunal was details of amount transferred to their sister company and she submitted that she is willing to produce such evidence to the original adjudicating authority if the matter is remanded with direction to follow the earlier order of this Tribunal. Learned AR raises serious objection to this submission. He submits that since the Revenue did not have the details of actual amount involved in sale of land by the sister company to the individual members, show-cause notice was issued showing the amounts transferred to sister company as the consideration for the land. He draws our attention to one of the sale deeds on record and submits that the sale deeds have been executed as if the sale has been made by M/s. Amrutha Estates to the individual members. It is his submission that in such a case, there would not have been any sale of land by the appellant at all. We do not consider that this has to be necessarily the case just because the sale deed executed between the sister company and the members. It is quite possible that the appellant recovers the money for the land at the time of granting membership and subsequently transfers the money to the seller of the land to the member. Therefore we do not think that this is a conclusive evidence as regards the collection of money towards land by the appellant without actually selling the land.
4. Even though the learned advocate for the appellants insisted that we should follow the earlier order of this Tribunal which had directed the appellants to produce details of amount transferred and the related accounts of the two companies before the Commissioner and had not given a direction for production of sale deeds, we are not able to agree with this suggestion. If the actual amount reflected in the sale deed is less than what is shown as transferred to the sister company by the appellant, as submitted by the learned AR, it would amount to collection of membership fee in the name of land which would be inappropriate and incorrect in view of the fact that appellants have no grievance about paying service tax for membership fee during the relevant period. That being the situation, in our opinion, it would be in the interest of justice and fairness to require the appellants to produce the sale deeds. At the same time, we find considerable force in the submissions made by the learned counsel that no purpose will be served in requiring the appellants to submit all the sale deeds and quantify the amount only on that basis. We consider that it would be sufficient if the appellants give all the names of members with land who have been provided membership (with land). The Commissioner can select approximately 10% or below at random and in respect of those members if the appellants produce sale deeds and the relevant extracts of books of accounts so that Commissioner can verify and satisfy himself with the amount shown as collected for sale of land and transferred to the sister company is actually equal to the amount reflected in the sale deed. Learned counsel fairly agrees to this suggestion. We make it clear that in case appellant is not able to produce a few sale deeds in respect of selected members, Commissioner may select some other name at random.
5. In view of the above observations, the matter is remanded to the original adjudicating authority for the limited purpose of verifying the correctness of the claim regarding cost of land collected by the appellants by following the method suggested by us hereinabove. We make it clear that we are in full agreement with the earlier decision in the case of the very same assessee and the only modification suggested by us is as hereinabove.
(Operative portion of the order pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER Raja..
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