TMI Blog2020 (1) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER C L MAHAR: The brief facts of the matter are that the appellant association is engaged in the business of providing services to its members under the head of Club Membership and Associations‟. The appellant is registered with the Service Tax department for Membership of Club service/ Club and Association services falling under section 65(105) (zzze) of the Finance Act, 1994. During the audit of the financial statements of the appellant by the Department for the period 2010-2011 to 2011-2012, it was noticed that the appellant had received an amount of ₹ 85,79,282/- towards entry fee, annual membership fee and contribution from members. The Department observed that the appellant had shown value of service receipt of ₹ 31,50,000/- only in their ST -3 return for the financial year 2010-2011. It was also noticed by the Department‟s audit party from the trial balance statement for the financial year 2011-2012 that the appellant had received ₹ 70,05,000/- towards entry fee, annual membership fee and contribution from the members but, the appellants did not file any ST Return for the period and it did not discharge service tax liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of India [2015 (37) STR 961(Guj)]; 3. Ranchi Club Ltd. vs. Chief Commissioner[ 2012 (26) STR 401 (jhar)]; 4. NASSCOM v Commissioner [2015(37) STR 1041(Tri-Del)] 6. The learned advocate relying upon the above decisions has submitted that confirmation of demand by learned Commissioner (Appeals) is not sustainable as the activities undertaken by the appellant are excluded from the purview of Cub or Association service. It has further been submitted that the appellant was engaged in promotion and protection of non alcoholic industry in India. These activities are in the nature of general public utility for use by the members of the appellant from the beverage industry. It has further been added that the appellant association is non- profit organisation and thus as per the CESTAT decision in the case of Federation of India Chambers of Commerce and Industry vs. Commissioner reported in 2015 (38) STR 529 (Tri-Del)], the appellant is covered under exclusion clause in the definition of club or association under section 65(25a) of the Finance Act, 1994. It was further stressed that learned Commissioner (Appeals) has gravely erred in demanding service tax on the funding which hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been provided to the appellant. It is, therefore, submitted that no demand of service tax can sustain with effect from 01 July, 2012 also and the impugned order is liable to be set aside on this ground alone. 9. It is further submitted that the extended period cannot be invoked in their case and no interest and no penalties are imposable. The appellant are entitled to benefit of cum-tax. Without prejudice to the above, it is submitted that the appellant was under a bona fide belief that it is not liable to pay service tax as no services were being provided by it. Further, the appellant duly cooperated with the Department and provided all requisite information. The appellant did not suppress any facts. Thus, the invocation of extended period in the impugned order is not sustainable merely on the basis of non-payment of tax or non-filing of returns. In any case, the present matter involves interpretation of law in light of the given facts and circumstances. Also, all transactions were duly recorded in the books of accounts of the appellant. Thus, invocation of extended period of limitation in the impugned order is not sustainable. 10. We have also heard Shri R K Maji, learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LB] and Chief Commissioner vs Ranchi Club Ltd. reported in [2019-TIOL-449 SC-ST-LB]. The relevant extract of the judgement is as under: 72. The definition of club or association contained in Section 65(25a) makes it plain that any person or body of persons providing services for a subscription or any other amount to its members would be within the tax net. However, what is of importance is that anybody established or constituted by or under any law for the time being in force, is not included. Shri Dhruv Agarwal laid great emphasis on the judgments in DALCO Engineering Private Limited v. Satish Prabhakar Padhye and Ors. Etc. (2010) 4 SCC 378 (in particular paragraphs 10, 14 and 32 thereof) and CIT, Kanpur and Anr. v. Canara Bank (2018) 9 SCC 322 (in particular paragraphs 12 and 17 therein), to the effect that a company incorporated under the Companies Act cannot be said to be established by that Act. What is missed, however, is the fact that a Company incorporated under the Companies Act or 70 a cooperative society registered as a cooperative society under a State Act can certainly be said to be constituted under any law for the time being in force. In R.C. Mitter Son ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not included in the service tax net. 74. The next question that arises is - was any difference made to this position post 1st July, 2012? 75. It can be seen that the definition of service contained in Section 65B(44) is very wide, as meaning any activity carried out by a person for another for consideration. Person is defined in Section 65B(37) as including, inter alia, a company, a society and every artificial juridical person not falling in any of the preceding sub-clauses, as also any association of persons or body of individuals whether incorporated or not. 76. What has been stated in the present judgment so far as sales tax is concerned applies on all fours to service tax; as, if the doctrine of agency, trust and mutuality is to be applied qua 72 members‟ clubs, there has to be an activity carried out by one person for another for consideration. We have seen how in the judgment relating to sales tax, the fact is that in members‟ clubs there is no sale by one person to another for consideration, as one cannot sell something to oneself. This would apply on all fours when we are to construe the definition of service under Section 65B(44) as well. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d company or an incorporated cooperative society. As the same expression has been used in Explanation 3 post-2012 (as opposed to the wide definition of person contained in Section 65B(37)), it may be assumed that the legislature has continued with the pre-2012 scheme of not taxing members‟ clubs when they are in the incorporated form. The expression body of persons may subsume within it persons who come together for a common purpose, but cannot possibly include a company or a registered cooperative society. Thus, Explanation 3(a) to Section 65B(44) does not apply to members‟ clubs which are incorporated. 83. The expression unincorporated associations would include persons who join together in some common purpose or common action see ICT, Bombay North, Kutch and Saurashtra, Ahmedabad v. Indira Balkrishna (1960) 3 SCR 513 at page 519-520. The expression as the case may be would refer to different groups of individuals either bunched together in the form 75 of an association also, or otherwise as a group of persons who come together with some common object in mind. Whichever way it is looked at, what is important is that the expression body of persons cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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