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2020 (3) TMI 1098 - AT - Service TaxClub and Association Service - Levy of service tax - advance entrance/enrollment fee collected from prospective members - Mutuality of interest - HELD THAT - The issue herein is squarely covered in favour of the appellant/assessee by Hon ble Supreme Court in the case of STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. 2019 (10) TMI 160 - SUPREME COURT and also by the Hon ble Jharkhand High Court in the case of RANCHI CLUB LTD. VERSUS CHIEF COMMISSIONER OF CENTRAL EXCISE SERVICE TAX 2012 (6) TMI 636 - JHARKHAND HIGH COURT where it was held that from 2005 onwards, the Finance Act of 1994 does not purport to levy service tax on members clubs in the incorporated form. Thus, there being mutuality of interest between the club and its members, there is no transfer of ownership of the service - appeal allowed - decided in favor of appellant.
Issues involved: Liability to pay Service Tax on "advance entrance/enrollment fee" collected from prospective members.
Analysis: Issue 1: Liability to pay Service Tax on "advance entrance/enrollment fee" The main issue in this appeal was whether the appellant is liable to pay Service Tax on the "advance entrance/enrollment fee" collected from prospective members. The Authorized Representative for the Revenue relied on the impugned order. However, the Tribunal found that this issue is settled in favor of the appellant/assessee by the decisions of the Hon'ble Supreme Court in the case of State of W. Bengal Vs Calcutta Club Ltd., 2019 (29) GSTL 545 (SC) and the Hon'ble Jharkhand High Court in the case of Ranchi Club Ltd Vs chief CCE & ST, 2012 (26) STR 401 (Jhar.). The Tribunal noted that there is a mutuality of interest between the club and its members, leading to no transfer of ownership of the service. Consequently, the Tribunal allowed the appeal by the appellant (ST/949/2009) and dismissed the appeal by the Revenue (ST/947/2009), which was filed only for disputing the amount of penalty. The Tribunal disposed of both appeals and cross objection based on the aforementioned legal precedents. This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on relevant legal principles and precedents.
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