TMI Blog2023 (5) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating authority by relying on the circular No.109/03/2009 dated 23/02/2009 issued by CBIC, had held that there is no relationship of service provider or service receiver between the parties to joint venture agreement and there is no consideration received by either side for the claim of rendering certain service. In conclusion, he had dropped the demand of service tax raised in respect of Business Auxiliary Service . This precise issue of retaining certain amount by a hospital towards the necessary infrastructure facilities provided by it to the doctors who render medical services, for which the patients are charged as fees, and the total fees paid are settled between the hospital and doctors at the ratio of 22:78 had come up for consideration earlier before two benches of the Tribunal in the case of M/S SIR GANGA RAM HOSPITAL VERSUS COMMISSIONER OF SERVICE TAX, NEW DELHI [ 2020 (11) TMI 536 - CESTAT NEW DELHI ]. The demand of service tax for which show cause notice dated 17/4/2014 was issued to the respondent relate to taxable service provided or to be provided, to a client by any person in relation to business auxiliary service under Section 65(105) (zzb) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided by the respondent 3. The brief facts of the case are that the appellant had issued show cause notice dated 17/04/2014, to the respondent M/s. Goa Golf Club Private Limited, Goa (GGCPL), on the premise that M/s GGCPL is operating and running the casino on behalf of the said joint venture and have thus provided Business Auxiliary Service as per Section 65 (19) (vi) of the Finance Act, 1994 read with Section 65 (105) (zzb) of the Finance Act, 1994 to the business of the joint venture entity. Therefore, M/s GGCPL appear to be liable for payment of service tax under Business Auxiliary Service on the amount of share of Gross Win received from the Joint Venture Entity. The period in dispute is from October, 2008 to March, 2013.The relevant portion of the show cause notice dated April 17, 2014 is reproduced below: 2. During the course of audit on the records of M/s. Britto Amusement Private Limited, it was noticed that M/s. Britto Amusement Private Limited (hereinafter referred as M/s. BAPL) have entered into a joint venture agreement with M/s. Goa Golf Club Private Limited, (hereinafter referred as M/s. GGCPL) vide joint venture agreement dated 1st April, 2002. Thus a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or ..; (vi) provision of service on behalf of the client, or xxxx xxxx xxxx 4.2. Section 65 (105) (zzb) taxable service means any service provided or to be provided to a client by any person in relation to business auxiliary service; 4.3. Thus, it appears that the noticee are liable to pay service tax, on the consideration received from the joint venture towards provision of service on behalf of the client viz. the joint venture in as much as the said service are appropriately classifiable under Business Auxiliary Service as defined above. However, it was found that M/s GGCPL are not paying service tax on the amount of its share of Gross Win received by them from the joint venture entity. (emphasis supplied) 4. The respondent filed a reply for the aforesaid show cause notice and denied the allegations. Further, the Commissioner, Central Excise Service Tax, Goa, being the adjudicating authority, had carefully gone through the records of the case, the allegations made and the charges levelled against the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the consideration as per the joint venture agreement. The learned authorised representative, therefore stated that the service provided by M/s GGCPL is appropriately classifiable under business auxiliary service. 8. The submissions advanced by the learned authorised representative for the appellant and the learned counsel appearing for the respondent have been carefully considered. 9. In order to appreciate the contentions, it would be appropriate to refer the agreement that was entered into between the two parties to the joint venture agreement, and the legal provisions governing the scope of service tax as given under the definition clause to the Finance Act, 1994: The relevant portion of the joint venture agreement is as follows; 2. Both parts hereby agree to share Gross wins in the ratio of 55:45 respectively. The terms Gross wins is being the gross income received by the first part for its operation in the premises of the second part from its guest net of payments made to the guests for their winnings. In other words it is the balance of amount paid by the guests in the machines/tables placed by the first part in the premises of the second part net of amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in the case of Sir Ganga Ram Hospital and Ors. Vs. CCE, Delhi-I 2018 (11) G.S.T.L. 427 /Commissioner of Service Tax, New Delhi 2020 (11) TMI 536-CESTAT New Delhi . The first decision rendered on December 06, 2017 was considered in the subsequent decision rendered on September 02, 2020. The Tribunal, after consideration of the conditions prescribed in the agreement held that this arrangement was for joint benefit of both the parties with shared obligations, responsibilities and benefits and, therefore, no service was provided by the hospital to the doctors. 13. We also notice that on this same issue a show cause notice was issued to the second party i.e., M/s BAPL separately vide F. No. CX-ST/57/Vaiguinim/SCN/ Commr./2012-13 dated 23/4/2013 demanding service tax on the amount received from the joint venture between M/s GGCPL and M/s BAPL for providing infrastructure facilities for the purpose of running a casino, as mentioned in paragraph 3 above. After its adjudication by the Commissioner, Central Excise Service Tax, Goa, as adjudicating authority in Order-in-Original No.GOA-EXCUS-000-COMM-014- 2014-15 dated 30/12/ 2014, this case had come up in an appeal filed by the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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