2022 (9) TMI 562 - AT - Service Tax

Levy of service tax - Club Membership services or not - providing infrastructural support services to the two caterers for running their catering business inside the club premises - HELD THAT - The issue related to taxability of Club Membership was under litigation before various forums. Finally, the hon ble Supreme court in the case of CALCUTTA CLUB LTD 2019 (10) TMI 160 - SUPREME COURT the larger bench has decided the issue - Though the issue is settled as per the Hon ble Supreme Court judgment, each case has to be re-considered applying the judgment of the hon ble Supreme Court viz-a-viz the facts of each case. The present issue needs to be reconsidered by the adjudicating authority on the basis of the law laid down by the Hon ble Supreme Court vis- -vis facts of each case therefore, the impugned order is set aside and matter remanded to the adjudicating authority for passing a fresh order - appeal allowed by way of remand.

Summary

Issues:
Taxability of services provided by the club to caterers inside the club premises.

Analysis:
The appellant had contracts with two caterers to run canteens inside the club premises, providing them with infrastructure and facilities for their business operations. The club retained a percentage of the caterers' revenue for the use of premises, electricity, water, and maintenance. The department argued that the club provided infrastructural support services to the caterers, making them liable for service tax on the income earned from these services.

The appellant's representative cited a Supreme Court judgment in the case of STATE OF WEST BENGAL VS. CALCUTTA CLUB LTD., stating that the issue of taxability of Membership of Club or Association Service had been settled. The representative argued that based on this judgment, the present service tax liability was not sustainable.

The revenue's representative sought a remand of the matter, emphasizing that the Supreme Court judgment was not available when the adjudication order was passed. The Tribunal acknowledged that the issue of taxability of Club Membership was settled by the Supreme Court but noted that each case needed to be reconsidered based on the judgment and the specific facts involved.

Consequently, the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for a fresh order. All issues were kept open for reconsideration, with a directive for the authority to pass a denovo order within two months. The appeal was allowed by way of remand to the adjudicating authority.