2015 (4) TMI 745 - AT - Service Tax

Refund claim - service tax paid under protest under bonafide belief that service tax is chargeable - concept of mutuality - Co-operative Society - collecting amounts from their members towards maintenance charges, parking charges, NOC Charges, antenna charges, water charges and electricity charges, etc - First appellate authority has decided in favor of assessee - Revenue in appeal before the Apex Court against the decision of Hon'ble High Court of Jharkhand in the case of Ranchi Club Ltd. (2012 (6) TMI 636 - Jharkhand High Court). Held that - the appellate authority's order is correct for more than one reasons. Firstly, we find that the first appellate authority has correctly followed the law has been laid down by the Hon'ble High Court of Jharkhand in the case of Ranchi Club Ltd. - secondly the findings recorded by the first appellate authority that there is no mutuality of interest in this case is correct as the respondent is a Co-operative society and the provisions of Maharashtra Co-Operative Act will apply. - Thirdly, we find that the amount which have been collected by the respondent from their members is undisputedly utilised for maintenance and upkeep of the society; property for which all members are charged depending upon the space occupied by the member of the society. - first appellate authority is correct in coming to the conclusion the orders in original need to be set aside and the respondent is eligible for refund of the amounts paid by them under protest - Decided against Revenue.

Summary

Issues:
1. Interpretation of services under Club or association services and renting of immovable property services.
2. Applicability of tax liability and refund claim.
3. Legal implications of judgments by different High Courts on similar issues.
4. Mutuality of interest in a Co-operative Society.
5. Utilization of collected funds for maintenance and upkeep of the society.

Analysis:
1. The appeals revolved around determining whether the services provided by the respondent fell under Club or association services and renting of immovable property services. The first appellate authority ruled in favor of the assessee, leading to the Revenue's grievance. The respondent, a Co-operative Society, collected various charges from members for maintenance purposes. The authority allowed a refund claim based on a judgment from the High Court of Jharkhand, setting aside the original orders.

2. The Revenue contended that the services did not fall under the mentioned categories and that the association was not exempt under Section 25 of the Act. The case of Ranchi Club Ltd. was highlighted, with an appeal pending before the Apex Court. The respondent had paid the tax under protest and subsequently filed a refund claim, which was rejected by the adjudicating authority.

3. The legal representatives referred to judgments from different High Courts, such as the case of Sports Club of Gujarat Ltd. and Tanhee Heights Co-operative Housing Society Ltd. The Tribunal found the appellate authority's decision correct based on multiple reasons, including the application of the law laid down by the High Court of Jharkhand, the absence of mutuality of interest in the Co-operative Society, and the utilization of collected funds for society maintenance.

4. The Tribunal concurred with the legal representative's argument that the issue was no longer res integra, emphasizing that the association and its members could not be separated. Consequently, the Tribunal upheld the appellate authority's decision to set aside the original orders and grant the respondent a refund of the amounts paid under protest. The Revenue's appeals were rejected, affirming the correctness of the impugned orders.

This detailed analysis provides a comprehensive overview of the legal issues, arguments presented, and the Tribunal's reasoning leading to the judgment in the case.