TMI Blog2023 (6) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are specifically excluded are not liable for service tax. Any other kind of service which qualifies the definition of service contained in the Act would be exigible to service tax. The Supreme Court in Calcutta Club Ltd. [ 2019 (10) TMI 160 - SUPREME COURT ] examined the definition of club or association as contained in section 65(25a) of the Finance Act from June 16, 2005 up to July 1, 2012 holding that incorporated clubs or associations or prior to 1st July, 2012 were not included in the service tax net. It would be seen from the judgment of the Supreme Court that club or association was earlier defined under section 65(25a) and 65(25aa) to mean any person or body or persons providing service. The expression body of persons cannot be possibly include persons who are incorporated entities, as such entities have been expressly excluded under sections 65(25a)(i) and 65(25aa)(i) as any body established or constituted by or under any law for the time being in force . Body of persons , therefore, would not include a body constituted under any law for the time being in force. Thus, companies and cooperative societies, prior to July 1, 2012, which were registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed by the Tribunal in Commissioner of Service Tax, Delhi- II Vs. M/s Manufacturers Association For Information Technology [Service Tax Appeal No. 54143 of 2015 dated August 31, 2020; 2020-TIOL-1421-CESTAT-DEL]. 5. Dr. Radhe Tallo, learned authorized representative appearing for the department has however, supported the impugned order and has submitted that it does not call for any interference in this appeal. 6. The submissions advanced by learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 7. The issue that needs to be decided in this appeal is as to whether service tax can be levied on activities undertaken by a club for its members for membership fee. 8. Though the period involved in the present appeal is post negative list i.e. post 01.07.2012, but in order to understand the controversy it would be appropriate to refer to the position that existed prior to 01.07.2012. 9. Section 65(25a) of the Finance Act that was inserted w.e.f. June 16, 2005 defines club or association and it is as follows:- 65 (25a) club or association means any person or body of persons providing services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. and others [(2017) 13 SCC 806] in the following manner:- 20. Thus, right from 1994 till 2011, the mode adopted was to specify those services on which it was intended to levy service tax. However, Parliament by the Finance Act, 2012 w.e.f. 1-7- 2012 has introduced altogether new system of taxation of services by making a paradigm shift. Now, the scheme of taxation of services is based on negative list of services. Therefore, earlier list of taxable services is no longer applicable. Instead two things have happened. First, the term service is defined whereas there was no definition of service in the Finance Act, 1994 which position remained till 2012. Earlier, each individual service on which tax was levied (known as taxable service) was defined. Secondly, the definition of service given now contains a negative list which is contained in Section 66-D of the Act. In other words, it specifically excludes certain transactions from the ambit of service. Thus, those transactions which are specifically excluded are not liable for service tax. Any other kind of service which qualifies the definition of service contained in the Act would be exigible to service tax. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay High Court, therefore, in the case of Dwarkadas Khetan and Co. v. CIT [(1956) 29 ITR 903, 907] , was right in holding that the section could not be restricted in its application only to a firm which had been created by an instrument of partnership, and that it could reasonably and in conformity with commercial practice, be held to apply to a firm which may have come into existence earlier by an oral agreement, but the terms and conditions of the partnership have subsequently been reduced to the form of a document. If we construe the word constitute in the larger sense, as indicated above, the difficulty in which the learned Chief Justice of the Calcutta High Court found himself, would be obviated inasmuch as the section would take in cases both of firms coming into existence by virtue of written documents as also those which may have initially come into existence by oral agreements, but which had subsequently been constituted under written deeds. 73. It is, thus, clear that companies and cooperative societies which are registered under the respective Acts, can certainly be said to be constituted under those Acts. This being the case, we accept the argument on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 65(25aa) to mean any person or body of persons providing service. In these definitions, the expression body of persons cannot possibly include persons who are incorporated entities, as such entities have been expressly excluded under section 65(25a)(i) and 65(25aa)(i) as anybody established or constituted by or under any law for the time being in force . Body of persons , therefore, would not, within these definitions, include a body constituted under any law for the time being in force. 81. When the scheme of service tax changed so as to introduce a negative list for the first-time post 2012, services were now taxable if they were carried out by one person for another person for consideration. Person is very widely defined by section 65B(37) as including individuals as well as all associations of persons or bodies of individuals, whether incorporated or not. Explanation 3 to section 65B(44), instead of using the expression person or the expression an association of persons or bodies of individuals, whether incorporated or not , uses the expression a body of persons when juxtaposed with an unincorporated association . 82. We have already seen how the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered under respective Acts, would be constituted under those Acts. Incorporated clubs or associations, therefore, prior to July 1, 2012 which were registered under Acts, would be constituted under those Acts. Incorporated clubs or associations, therefore, prior to July 1, 2012 were not included in the service tax net. After July 1, 2012, also the situation does not change for the reason that Explanation 3 uses the same expression. The Supreme Court held that 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 and Explanation 3(a) to section 65B (44) of the Finance Act would not apply to members of clubs which are incorporated. In this view of the matter, the Supreme Court categorically held that from 2005 onwards, the Finance Act does not purport to levy service tax on members of clubs in the incorporated form. 18. The aforesaid decision of the Supreme Court was followed by the Tribunal in Indian Beverage Association Vs Commissioner of Service Tax [Service Tax Appeal No. 51738 of 2016 decided on January 28, 2020] . 19. The decision of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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