2019 (8) TMI 1568 - AT - Service Tax

Demand of Service Tax - Business Support Service (BSS) - Renting of Immovable Property Service - appellants are receiving the amount from their licensed bookies and the caterers - HELD THAT - Definition of Business Support Service, as above, makes it abundantly clear that any service which is in relation to business or commerce and helps in enhancement of business amounts to Business Support Service. Even the infrastructural support provided to run a business is a Business Support Service. In the present case from the licence as given by the appellant to the bookmaker, it is abundantly clear that the appellant while providing an enclosure/stall in the appellant's race club to the bookies is providing as space to him to run his business of booking bets from the punters available within the premises of the appellants Club. The bet has to be on the Races being conducted by the club in its premises. Hence, providing a space in the club to such a bookmaker is nothing but a facility being given for him to properly run his business and in fact, to have more business. The said service is, therefore, in relation to the business of bookie and thus definitely amounts to Infrastructural Support being provided to the booker by the appellant which is well covered under Explanation to Section 65(104c) of Finance Act defining BSS. Charges received by the appellant from the bookies in the name of commission, but for providing Inter-venue Betting Services, Auditing Services, live telecast services and for the catering services being available to the bookmakers - demand of service tax - HELD THAT - The bookmaker can run his business if and only if the club is able to provide him the aforementioned services. This is sufficient for us to hold that the services are nothing, but the services are provided by appellants in relation to the business of the bookmakers. The admission that accounting facility has also been provided by the appellant to the book-makers corroborates the aforesaid opinion. The arguments of the appellant that auditors were provided only to discharge their statutory liability of maintaining the proper accounts and the charges collected from the bookmakers against the auditors fee were handed over as such to the auditors does not appear reasonable, as there is nothing on record that in addition to stall fee and the commission amount, as mentioned in the impugned license any other amount has been paid by the bookmaker to the appellant. All these activities when taken together are covered under the definition of Business Support Service - there are no infirmity in the order of the adjudicating authority below while confirming these demands. The Circular No. 334/4/2006, dated 28-2-2006 is also opined to have been wrongly interpreted. Mere use of word outsource in that Circular does not alter the definition of Business Support Service as being given in the statute. Therefore, the argument of the appellant that if the bookmaker has not outsourced the services to the club, the services cannot be Business Support Service, is not acceptable. Renting of Immovable Property - Demand for providing services to the caterers - HELD THAT - Admittedly, the caterer is allowed to roam around in the entire premises of the appellant to offer the food and the catering services. The appellant has provided a space to the caterer to put his staff within the clubs premises. Thus, in the case of caterer, the club is not providing any other service either in the form of cutlery crockery or in the form of serving boys. Hence, the service provided by the appellant is merely Renting of Immovable Property Service. For the period which is post-negative list era i.e. beyond the year 2012. Value of all the services other than those services specified in negative list, provided or agreed to be provided in the taxable territory by one person to another shall be levied to tax, as is emphasized in Section 66B, which was introduced with Finance Act, 2012. Hence, for the post-negative list era, the services need not to be classified specifically. Whenever there is a service rendered and a consideration in lieu thereof, in whatever form, has been received, the same is leviable to tax. In the present case, admittedly, the bookmakers were provided a space inside the appellants premises - Admittedly, the appellant was charging money from the bookmakers on two counts; a fixed amount for stall fee and a profit based amount as commission. These admissions make it abundantly clear that both the requirements of Section 66B stands fulfilled - there is no infirmity in confirmation of demand for the post-negative period as well. The demand qua receiving stall fee and commission from the bookies for services in relation to business including infrastructural support as consideration received for providing Business Support Service to the bookmakers and qua receiving charges from caterers to roam in the appellant s premises as consideration for providing Renting of Immovable Property Service has rightly been confirmed - there is no infirmity in the order under challenge. Appeal dismissed.

Summary

Issues Involved:
1. Classification of services provided by the appellant under Business Support Service (BSS) and Renting of Immovable Property Service (RIPS).
2. Validity of demands for service tax, interest, and penalties on the appellant.

Issue-Wise Detailed Analysis:

1. Classification of Services under BSS and RIPS:

a. Business Support Service (BSS):
The Tribunal examined whether the services provided by the appellant to the bookmakers, such as providing stalls, auditing, live telecast, inter-venue betting, and infrastructural support, fall under BSS. According to Section 65(104c) of the Finance Act, 1994, BSS includes services related to business or commerce, such as infrastructural support. The Tribunal found that providing stalls to bookmakers for conducting their business within the race club premises constitutes infrastructural support, thus classifying it under BSS. The Tribunal noted that the appellant's services, including auditing and live telecast, are integral to the bookmakers' business operations, thereby confirming the classification under BSS.

b. Renting of Immovable Property Service (RIPS):
The Tribunal also assessed whether the charges received from caterers should be classified under RIPS. According to Section 65(90a) of the Finance Act, 1994, RIPS involves renting immovable property for business or commerce. The Tribunal concluded that allowing caterers to operate within the club premises and charging them royalty amounts to renting immovable property. Hence, the charges received from caterers were rightly classified under RIPS.

2. Validity of Demands for Service Tax, Interest, and Penalties:

a. Pre-Negative List Era:
For the period before the introduction of the negative list (pre-2012), the Tribunal held that the services provided by the appellant to the bookmakers and caterers were correctly classified under BSS and RIPS, respectively. The Tribunal noted that the appellant's arguments, based on the Royal Western India Turf Club Ltd. case, were not applicable as the facts differed. The Tribunal upheld the demands for service tax, interest, and penalties for the pre-negative list period.

b. Post-Negative List Era:
For the period after the introduction of the negative list (post-2012), the Tribunal emphasized that Section 66B of the Finance Act, 2012, levies tax on all services except those specified in the negative list. The Tribunal found that the appellant's services, including providing stalls, live telecast, auditing, and catering, were taxable as they were not in the negative list. The Tribunal upheld the demands for service tax, interest, and penalties for the post-negative list period as well.

Conclusion:
The Tribunal concluded that the demands for service tax, interest, and penalties on the appellant for providing BSS to bookmakers and RIPS to caterers were correctly confirmed by the adjudicating authority. The appeals were rejected, and the order under challenge was upheld.