2017 (11) TMI 352 - AT - Service Tax

Levy of tax - sale of food and beverages - documentary evidence - Revenue s challenge is only on the ground that the assessee could not produce the documentary evidence which is required for not taxing the consideration towards the sale of food and beverages as per the Board Circular B1/6/2005-TRU dt. 27.07.2005 - Held that - the Commissioner (Appeals) had dropped the demand of ₹ 15,41,486/- on account of sale of food and beverages, considering the documents such as VAT Returns, Bar Room Sales Leger, Summary of Bar Room VAT Report, Specimen Bills etc. therefore it cannot be said that the Ld. Commissioner (Appeals) had dropped the demand without any basis. The documents referred in the finding of the Ld. Commissioner (Appeals) are more than sufficient to establish the receipt towards sale of food and beverages. Therefore, we do not find any infirmity in the order in as much as it dropped the demand of ₹ 15,41,486/- - decided against Revenue. Doctrine of mutuality - whether consideration receipt by the club from their members is taxable or otherwise? - Held that - Considering the doctrine of mutuality therefore all said judgments cited are also in jeopardy, accordingly this Tribunal cannot take any decision on the merit of the case in the present legal status of the issue on merit - As regard the quantification error pointed by the assessee in their grounds of appeal. We find that there appears to be apparent errors and if the same is rectified the demand would be substantially reduced - matter on remand. Partly decided against Revenue and part matter on remand.

Summary

Issues:
- Service tax demand on various charges collected by the assessee
- Validity of demand on sale of food and beverages
- Doctrine of mutuality and taxability of consideration received by the club from members
- Quantification errors in the demand calculation

Analysis:

1. Service Tax Demand on Various Charges Collected:
The appeal was filed by the Revenue against an order confirming a service tax demand on charges collected by the assessee from their members for various facilities. The department found that the assessee had not paid service tax on these amounts. The Commissioner (Appeals) partially allowed the appeal, setting aside a portion of the demand. Both the assessee and Revenue appealed against this decision.

2. Validity of Demand on Sale of Food and Beverages:
The Revenue contended that the demand on the sale of food and beverages should not have been dropped as the assessee failed to provide documentary evidence as per the Board's Circular. However, the Commissioner (Appeals) considered documents such as VAT returns, sales ledgers, and specimen bills submitted by the assessee, concluding that service tax was not applicable on these sales. The Tribunal upheld this decision, dismissing the Revenue's appeal.

3. Doctrine of Mutuality and Taxability of Consideration:
The assessee argued that the doctrine of mutuality applied, stating that services provided to club members did not amount to taxable services. They cited various judgments supporting this position. However, the Revenue contended that recent developments, including a Supreme Court reference, put the validity of these judgments in question. The Tribunal noted the uncertainty surrounding the issue and referred the matter back to the adjudicating authority for reconsideration.

4. Quantification Errors in Demand Calculation:
The assessee highlighted several errors in the calculation of the demand, including issues related to valuation, typographical errors, and incorrect consideration of certain figures. They argued that after rectification, the demand would be substantially reduced. The Tribunal acknowledged these errors and suggested a re-quantification after verification of the data submitted by the appellant.

In conclusion, the Tribunal dismissed the Revenue's appeal regarding the demand on the sale of food and beverages, citing sufficient documentary evidence provided by the assessee. However, due to the uncertainty surrounding the doctrine of mutuality and quantification errors in the demand calculation, the Tribunal remanded the matter back to the adjudicating authority for further review and consideration in light of pending Supreme Court decisions.