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TMI Blog2023 (10) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... companies and cooperative societies which are registered under the respective Acts, can certainly be said to be constituted under those Acts. This being the case, we accept the argument on behalf of the respondents that incorporated clubs or associations or prior to 1st July, 2012 were not included in the Service Tax net. Admittedly the Appellant Association has been formed by the persons engaged in stevedoring and dock activities. In the very aims and objects, it is mentioned that as the members have been facing difficulties due to renting, behaviour of the labourers and collective bargaining as well as illegal strikes which each individual person engaged in stevedoring is unable to handle at its individual level. Accordingly, feeling the need for a collective concern to deal with workmen or labourers, the people engaged in stevedoring business formed this Association and registered themselves under the Societies Registration Act, 1860 - There is element of mutuality between the Appellant Association and its Members who have formed the Association and subscribed to its capital and also pay annual subscription charges for administrative expenses. Though the Appellant Associatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nger period of limitation is applicable in this case. Based on the above allegations, the show cause notice proposes: (i) to demand Service tax amounting to Rs. 2,13,99,842/- (including Education Cess and Secondary Education Cess) payable on Manpower Recruitment or Supply Agency services provided by them for the period from 16.06.2005 to 31.03.2010 u/s 73(1) of the FA, 1994 read with the proviso contained therein; (ii) to demand Service tax amounting to Rs. 8,131/- (including Education Cess and Secondary Education Cess) for the period from 16.06.2005 to 31.03.2010 payable on Club or Association Services u/s 73(1) of the FA, 1994 read with the proviso contained therein; and (iii) to impose penalties u/s 76, 77 and 78 of the Finance Act, 1994. 3. The Appellant had filed reply, inter alia, contesting the allegations in the SCN, inter alia, on the ground that there is mutuality of interest between the Appellant Association and its members. However, the learned Commissioner rejecting the contentions of the Appellant has confirmed the demand proposed in the SCN vide OIO dated 21.02.2012 and also imposed penalty under Sec 76 for Rs.2,14,07,973/-. Further penalty of Rs.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort Area and therefore the service provided by the Association to its member cannot be treated as transaction between two different persons in order to attract levy of Service tax, during the material period. This issue is no longer res integra as per the decision of the Hon ble Supreme court in the case of State of West Bengal Vs. Calcutta Club Ltd. - 2019 (29) GSTL 545 (SC),wherein in paras 71 to 73, it was held as follows: 71. With this background, it is important now to examine the Finance Act as it obtained, firstly from 16th June, 2005 until 1st July, 2012. 72. The definition of club or association contained in Section 65(25a) makes it plain that any person or body of persons providing services for a subscription or any other amount to its members would be within the tax net. However, what is of importance is that anybody established or constituted by or under any law for the time being in force, is not included. Shri Dhruv Agarwal laid great emphasis on the judgments in DALCO Engineering Private Limited v. Satish Prabhakar Padhye and Ors. Etc., (2010) 4 SCC 378 (in particular paragraphs 10, 14 and 32 thereof) and CIT, Kanpur and Anr. v. Canara Bank, (2018) 9 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich may have initially come into existence by oral agreements, but which had subsequently been constituted under written deeds. 73. It is, thus, clear that companies and cooperative societies which are registered under the respective Acts, can certainly be said to be constituted under those Acts. This being the case, we accept the argument on behalf of the respondents that incorporated clubs or associations or prior to 1st July, 2012 were not included in the Service Tax net. 7. The Appellant also refers to and rely upon the following decisions of the Hon ble High Courts and Tribunal, wherein in the similar set of facts it was held that the service of the club/society to members of club/co-operative societies, is not a service by one to another and therefore is not chargeable to Service tax: Sports Club of Gujarat vs. UOI, 2013(31)STR-645(Guj) Matunga Gymkhana Tahnee Heights Co-operative Society Ltd., and Others vs. CST, Mumbai, 2015-TIOL-108-CESTAT-Mum Ranchi Club Limited vs. Chief Commissioner of Central Excise Service Tax 2012 (26) STR 401(Jharkhand) Chief Commissioner vs. Ranchi Club Ltd. 2013(32) STR J34(SC) Federation of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn is filed the date of payment of Service tax. It is an admitted fact in the present case that the Appellant is no registered with the department for payment of Service tax and the last date for payment of Service tax 31.03.2010, which is the relevant date in this this case. Therefore, from the date of issue of SCN i.e., 21.10.2010, the normal period of one year would be 22.10.2009 and accordingly the normal period in this case should be restricted to the period from 22.10.2009 to 31.03.2010 only, if at all there exits any levy on the activities of the Appellant. This submission is without prejudice to the submission made in paras hereinabove, on merits, that during the material period there was no levy of Service tax on the activities of the Appellant. 10. As pleaded above since there is no levy of Service tax on the activities of the Appellant during the material period, the demand of interest and also the penalties imposed cannot be sustained in law. 11. Learned Counsel further urges that so far as demand under Club or Association service is concerned, that is also erroneous on the ground of mutuality. The amount has been paid by the members of the Appellant Association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1860. The persons who have subscribed to the Memorandum of Association are all persons engaged in stevedoring business. Even Membership is also open only to persons engaged in stevedoring business and thus association so formed is managed by its members only for its mutual benefit. Thus, the Appellant Association, though registered under Societies Registration Act, is more in the nature of trade union of people engaged in business of stevedoring and dock activities. Further, we find that there is element of mutuality between the Appellant Association and its Members who have formed the Association and subscribed to its capital and also pay annual subscription charges for administrative expenses. Though the Appellant Association is providing the services of Manpower Supply to its members, the same is not taxable on the ground of mutuality. Further it is also clarified by the Ruling of Ranchi Club Limited vs. Chief Commissioner of Central Excise Service Tax 2012 (26) STR 401(Jharkhand) that the Appellants are registered cooperative society and any such activity rendered by them to their member societies is a service to themselves and there is no service provider- service recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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