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2018 (10) TMI 901 - AT - Service TaxRefund claim - duty paid under protest - interpretation of statute - 'Distinct Person' - Club or Association service - grounds assigned for claim of refund were that there are no distinct persons viz, service provider and service receiver and since the person contributing and benefiting are the same, as per the principles of mutuality, the activities should not be subjected to levy of service tax. Whether the ld. Commissioner (Appeals) has correctly interpreted the statutory provisions to conclude that the appellant's society and its members are distinct persons due to Explanation 3(a) to Section 65B(44) of the Finance Act, 1994 and therefore, should not be entitled to the benefit of refund of service tax paid on charges recovered from its members? Held that:- There is no much of difference for recognition of the taxable service in dispute, for levy of service tax, under both the un-amended and amended provisions of the service tax statute. In order to be categorized as a "taxable service", there must be existence of two parties i.e. the service provider and the service receiver. As far as the relationship between an incorporated society or club and its members is concerned, it is an undisputed fact that such incorporated association is a distinct legal entity. However, since the association was formed or constituted and existed for the exclusive purpose of catering/meeting to the requirements of its members, as per the laid down policy in the bye law, it cannot be said that there is involvement of two persons, one to be termed as the service provider and the other as the service receiver. Thus, the incorporated association and its member being one and the same, the activities undertaken or the services provided by the former will not be considered as a service, exigible to service tax under the principle of mutuality. Status of the appellant, whether an incorporated body or otherwise - Held that:- Upon registration of the society, the same is legally accepted as a body corporate and thereafter, its function and operation are strictly guided as per the laid down bye laws, provided for the purpose. In this case, it is no doubt, a fact that the appellant is a co-operative society and is duly incorporated under the Act of 1960. The appellant also do not provide any service to its members, who pay the amount towards their share of contribution, for occupation of the units in their respective possession - the purpose for which the appellant's society was incorporated, clearly demonstrate that it is not at all provides any service to its members and the share of contribution is to meet various purposes - the case of the appellant is not confirming to the requirement of 'service', as per the definition contained in Section 65B(44) of the Act. The activities undertaken by the appellant should not fall within the scope and ambit of taxable service, for payment of service tax - Refund allowed - appeal allowed - decided in favor of appellant.
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