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TMI Blog2023 (10) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... able to Service Tax. The allegation made in the show cause notice is on the completely different provision and the grounds than the statutory provision applied while confirming the demand of Service Tax in the adjudication order. Therefore, the adjudication order has travelled absolutely beyond the scope of show cause notice. The demand of Service Tax is liable to be set aside on this ground itself that the adjudication order cannot travel beyond the show cause notice. From the consistent view of the Apex Court in COMMISSIONER OF CENTRAL EXCISE VERSUS GAS AUTHORITY OF INDIA LTD. [ 2007 (11) TMI 276 - SUPREME COURT] and PRECISION RUBBER INDUSTRIES (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI [ 2016 (4) TMI 841 - SUPREME COURT] and following the same by the Hon ble Gujarat High Court in COMMISSIONER VERSUS RELIANCE PORTS AND TERMINALS LTD. [ 2015 (10) TMI 1571 - GUJARAT HIGH COURT] , it is settled that the show cause notice is foundation of a case and any proceeding whether adjudication or appellate proceeding cannot travel beyond the show cause notice. Therefore, following the settled legal position as cited above, the demand in the present case is not sustainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under a bonafide belief that the appellant and its members are no distinct person and following doctrine of mutuality the Service Tax was not discharged by the appellant on the amounts collected by it from the Members. The case of the department is that the appellant in terms of definition of Club or association service as provided in the sub clause (zzze) of clause 105 of Section 65 of the Finance Act, 1994 are liable to pay the service tax. Accordingly a show cause notice dated 20.06.2014 was issued proposing demand of Service Tax for the period 01.07.2012 to 31.03.2014. Though the show cause notice was issued referring to the statutory provision prevailing prior to 01.07.2012 but in the adjudication order the demand of service tax was confirmed considering the provisions for taxability of the service prevailing with effect from 01.07.2012. the Adjudicating Authority vide Order-In-Original dated 30.03.2016 confirmed the demand, appropriated a apart of the demand already paid, demanded interest on the Service Tax confirmed and also imposed penalty under Section 77 and 78. Being aggrieved by the said impugned order-in-original, the appellant filed the present appeal. 2. Shri Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in case of incorporated body. 2.3 He further submits that in a particular case of Cooperative body the Hon ble Supreme Court in the case of CCE Vs. Rajasthan Co-Operative Dairy Federation Ltd - 2022 (65) GSTL 257 (SC) also reiterates the view taken in case of Kolkata Club Ltd. and held that no service tax is payable, by dismissing the Revenue s appeal. 2.4 Without prejudice to the above submissions, he further submits that the appellant have also strongly raised the issue with regard to the maintenance deposits that such deposit which is refundable cannot treated as consideration towards any service. He submits that the Adjudicating Authority did not consider it as deposit for the reason that the appellant are enjoying the interest on such deposit. 2.5 It is his submission that merely because some interest is accrued the nature of the deposit will not change and the same cannot be considered towards the consideration of service. In support of this submission, he placed reliance on the following Judgments: Commissioner of Central Excise Vs. Gas Authority of India Ltd- 2008 (232) ELT 7 (SC) Precision Rubber Industries (P) Ltd. Vs. Commissioner of Central Excise, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in the present case the demand of service tax was confirmed under the head of club or association service as specified in Sub clause (zzze) of clause (105) of section 65 of the finance Act, 1994 and also considering the provision of service in terms of section 65B (44) of Finance Act, 1994 effective from 01.07.2012. We find that in the entire show cause notice the proposal of service tax demand was only on the basis of the definition of club or association service as specified in sub clause (zzze) of clause (105) of section 65 of the Finance Act, 1994. Whereas in the adjudication order, the demand was confirmed on the basis of the statutory provision prevailing with effect from 01.07.2012 where under the concept of definition of service was given away and negative list was introduced, according to which irrespective of any service provided by one person to another person except the services prescribed under the negative list are chargeable to Service Tax. 4.1 We find that the allegation made in the show cause notice is on the completely different provision and the grounds than the statutory provision applied while confirming the demand of Service Tax in the adjudication orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. However, due to the passage of time, we are of the opinion that it would not be advisable (or permissible under the provisions of the Central Excise Tariff Act) to permit the Revenue to reopen the entire proceedings and classify the goods under Chapter Heading 8448.00. 13. Accordingly, while setting aside the impugned order passed by the Tribunal, we remand the matter to the Tribunal to take a decision on whether the goods manufactured by the assessee are classifiable under Chapter Heading 4009.99 as claimed by the assessee or 4016.99 as claimed by the Revenue. The order of remand is limited only to this issue. c) In the case of Commissioner Vs. Reliance Ports and Terminals Ltd (supra) the Hon ble Gujarat High Court has passed the following decision: 8. This court has considered the submissions advanced by the learned counsel for the respective parties and has perused the impugned orders passed by the Tribunal as well as by the Commissioner as well as the decisions cited by the learned counsel for the respondent. 9. On a conjoint reading of the show cause notice issued to the assessee and the questions proposed in this appeal, it is evident that the issues ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that the appellant is a registered corporative society under the Gujarat Corporative societies Act, 1961 therefore, it clearly falls under the category of a members society which is incorporated. The definition of club or association provided under the sub clause (zzze) of clause (105) of Section 65 of the Finance Act, 1994 is reproduced below: Definition and scope of service: Club or Association means any person or body of persons providing services, facilities or advantages, for a subscription or any other amount, to its members, but does not include (i) Any body established or constituted by or under any law for the time being in force;or (ii) Any person or body of persons engaged in the activities of trade unions, promotion of agriculture horticulture or animal husbandry; or (iii) Any person or body of persons engaged in any activity having objection which are in the nature of public service and are of a charitable religious or political nature; or (iv) Any person or body of persons associated with press or media : (section 65(25a) of the finance Act,1994) Taxable Service means any service provided or to be provided to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporative society and its members, it cannot be said that a person had provided service to another person. There is no difference between the corporative society and its members that means both are one. Accordingly, there is no service provision by one person to another person. Therefore even as per the definition of service provided under section 65B(44) with effect from 01.07.2012, the activity between the appellant and it's members does not fall under the definition of service. Though we have discussed above on the issue in length but the issue is no longer res-integra as the Hon ble Supreme Court in the land mark judgment of the larger bench in the case State of West Bengal Vs. Culcutta club Ltd. (supra) considered this very issue and not only for the period prior to 01.07.2012 but also for the period post 01.07.2012 and came to the conclusion that since there is a doctrine of mutuality between the club or association and its members, no provision of service exists, particularly in a case where a body/club/ association is incorporated. 4.5 In the present case, as discussed above the appellant being admittedly an incorporated society under the Gujarat corporative Societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore of the view that the Jharkhand High Court and the Gujarat High Court are correct in their view of the law in following Young Men s Indian Association (supra). We are also of the view that from 2005 onwards, the Finance Act of 1994 does not purport to levy Service Tax on members clubs in the incorporated form. 85. The appeals of the Revenue are, therefore dismissed. Writ Petition (Civil) No. 321 of 2017 is allowed in terms of prayer (i) therein. Consequently, show cause notices, demand notices and other action taken to levy and collect Service Tax from incorporated members clubs are declared to be void and of no effect in law. From the above specific finding for the period post 01.07.2012 also the demand of Service Tax under club or association does not sustain. The identical issue was considered by Hon ble Supreme Court also in the case of CCE Vs. Rajasthan Co-Operative Dairy Federation Ltd (Supra) wherein following their Lordships earlier judgment in the case of the State of West Bengal Vs. Culcutta club Ltd. (supra). The revenue s appeal was dismissed. This further reinforce that appellant being identically placed Co-Operative body of the appellant in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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