TMI Blog2013 (5) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... lant has passed the hurdle of unjust enrichment - the provisions of Section 12B will not be applicable in this case as the club and the members are not separate and are one as held in this case by Hon'ble High Court, the question of producing any other evidence in support of non-passing of Service Tax liability does not arise. - Refund allowed - decided in favor of assessee. - Appeal No.ST/123, 124, 558 & 559/2011 - Final Order Nos. A/10306-10309/2013-WZB/AHD - Dated:- 29-1-2013 - Hon'ble Mr. M.V. Ravindran, Member (Judicial) For the Appellant: Shri Vipul Khandhar, Chartered Accountant For the Respondent: Shri K. Sivakumar, Addl.Commissioner (A.R.) JUDGEMENT Per: M.V. Ravindran: All these 4 appeals are inter-linked and hence these are being disposed by a common order. 2. The facts of the case, in brief, are that the appellants having Service Tax registration No.AAACK7865QSTOOl are engaged in providing the services in respect of Mandap Keeper (MKR), Health Club Fitness Centre and Membership of Club Association. The appellants started paying service tax on Mandap Keeper Service from December, 2002 and filed Special Civil Application No. 17102/2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reconsider the issue afresh. During the pendency of this appeal before the Tribunal, the adjudicating authority passed an order taking the same view and rejected the refund claim filed by the appellant. Aggrieved by such an order, the appellant preferred an appeal before first appellate authority and the first appellate authority vide OIA No.230/2011(STC)/K.ANPAZHAKAN/ Commr(A)/Ahd, dt.07.09.2011, upheld the order, holding that the appellant has not passed the hurdle of unjust enrichment and coming to the conclusion, upheld the Order-in-Original. 4. Ld.Chartered Accountant appearing on behalf of the appellant would submit that the lower authorities have held that the appellant is required to justify that there is no unjust enrichment and Service Tax liability has not been passed on to their customers. It is his submission that both the lower authorities have not considered the fact that Hon'ble High Court of Gujarat in their own case has held that the members and the appellants are not separate and any services extended to the members cannot be considered as services rendered to any client and hence there is no question of passing on of incidence Service Tax to any other pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question involved in this case is whether the appellant is required to pass the hurdle of unjust enrichment in the facts and circumstances of the case or otherwise. 10. It is undisputed that the appellant herein is only providing facility of mandap to his own members. It is also undisputed that the appellant has paid the Service Tax on the insistence of the lower authorities by registering themselves but challenged the said action before the Hon'ble High Court. It would be appropriate to respectfully reproduce the relevant paragraph from the judgment of the Hon'ble High Court in the appellants own case. 8. Having considered the rival submissions raised by the respective parties, the point is whether going by the definition of mandap and mandap keeper, as defined in the Finance Act, 1994, the petitioner/club can be made liable to pay service tax or not. Service Tax was introduced in India vide the Finance Act, 1994. It is legislated by the Parliament under the residuary entry, i.e. Entry 97 of List I of the Seventh Schedule of the Constitution of India. It is an indirect tax and is to be paid on all the services notified by the Union Government for the said purpose. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of use by any person, including the third party, of an immoveable property as well as the furniture, fixtures and light fittings given by the landlord on consideration. Therefore, the meaning and definition of letting-out inheres transaction of commercial character, rather trading. Similarly, from the definition of mandap keeper it is clear that a person allows temporary occupation of a mandap for consideration, meaning thereby temporary parting with the possession to a third party for consideration. Thus, it is obvious that legislature intended this transaction must be for commercial purposes. Again, the words, provided to a client used in the definition of taxable service necessarily presupposes that the mandap keeper must be letting out an immoveable property to any person on consideration. 13. Now, it has to be examined in the context of the aforesaid reading and meaning of the three definitions as to whether the petitioner/Club does come within the purview of the same or not. One of the criteria is that such service must be provided to a client. If such service is not provided to a client, then it would not attract levy under the provisions of the Act. Hence, the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners are a proprietary club. Therefore, if the club space is allowed to be occupied by any member or his family members or by his guest, for a function, by constructing a mandap, the club cannot be called as mandap keeper because the club is allowing its own member to do so, who is, by virtue of his position, a principal of the club. If any outside agency is called upon to do the needful, it may raise a bill along with the service tax upon the club and the club as an agent of the members, is supposed to pay the same. 17. The authority cannot impose service tax twice once upon the people carrying out the business of mandap keeper and then upon the members club for the purpose of using the space for constructing or using it as a mandap. Therefore, apart from any other question, the possibility of double taxation cannot be ruled out. 18. If, in a given case, a person, being an owner of a house, allows another to occupy the house for the purpose of carrying out any function in that house, then it will not be construed as transfer of property. But, if such person calls upon a third party, a mandap keeper, to construct a mandap in such house, then in that case, such mandap kee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt and expenditure of the clubs is enjoyed and/or incurred by the members alone and not by third party. 23. The principle of mutuality is squarely applicable in this case as going by the definitions of mandap, mandap keeper and taxable service, as reproduced herein above, the facility of use of the premises and/or the facilities attached thereto, by the members of the clubs cannot be termed to be letting-out nor the members of the club using the facility/s or any portion of the premises for any function can be termed to be client/s. The services rendered by any person to his client pre-suppose the element of commerciality and obviously this transaction must be involved with a third party, as opposed to the members of the Club. 24. Merely because the clubs are exempted from the levy of income-tax, the respondents could not impose service tax, unless and until the same is permissible under the law. It has now become an elementary principle of law that the question of estoppel cannot arise nor the principle thereof can be applied as against the provisions of law. If it is found that a particular statute is not applicable to any person/s, the action taken by mistake cannot opera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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