Case Law Details

Case Name : M/s Surat Tennis Club & Other Vs CCE (CESTAT Ahemdabad)
Appeal Number : Appeal No. ST/136 & 137/2010
Date of Judgement/Order : 14/03/2011
Related Assessment Year :

The appellant clubs have maintained that it is a non profit organization and certificate has been issued by Assistant Charity Commissioner and therefore it has to be treated as a charitable trust. It was submitted that according to the definition of taxable service provided by a club or association, any person or body of persons engaged in the nature of chargeable activity, is exempt. However, it is seen that the services provided by the appellants such as health club, sports activity organizing tennis matches on renting the ground, renting the place for party purposes, organizing tournaments etc. cannot be called as non chargeable services.

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH, AHMEDABAD
COURT NO.II

Application No. ST/S/393 & 394/2010
Appeal No. ST/136 & 137/2010

Arising out of Order-in-Appeal No.RKA/94/SRT-I/2010, Dated: 11.2.2010
Passed by the Commissioner of Central Excise & Customs (Appeals), Surat

Date of Decision: 14.3.2011

M/s SURAT TENNIS CLUB & OTHER

Vs

CCE, SURAT

Appellant Rep by: Shri S Suriyanarayanan, Adv.
Respondent Rep by: Shri R S Sangia, SDR

CORAM: Archana Wadhwa, Member (J)
B S V Murthy, Member (T)

ORDER NO.S/362-363/WZB/AHD/2011

Per: B S V Murthy:

Demands for service tax with interest as applicable has been confirmed against the appellants and equal amount of penalty has also been imposed under Section 78 of Finance Act, 1994. The appellant one non profit organizations registered under Bombay Public Trust Act and is engaged in providing service of health club/ sports activities to its members. Though separate orders have been passed, issue involved is same. Hence a common order is passed.

2. Heard both the sides. The appellant clubs have maintained that it is a non profit organization and certificate has been issued by Assistant Charity Commissioner and therefore it has to be treated as a charitable trust. It was submitted that according to the definition of taxable service provided by a club or association, any person or body of persons engaged in the nature of chargeable activity, is exempt. However, it is seen that the services provided by the appellants such as health club, sports activity organizing tennis matches on renting the ground, renting the place for party purposes, organizing tournaments etc. cannot be called as non chargeable services. Further, it was also submitted that there were several decisions in their favor holding that the services provided by the association or a club to its members cannot be considered as a service. It was submitted that according to the precedent decisions, the service provided by a club or association cannot be separated from the members and therefore they have to be treated as one and the same and therefore it cannot be said that there are two parties. Several decisions were cited by the learned advocate. We find that many of the decisions cited by the learned advocate are with regard to stay application and in two cases namely Ahmedabad Management Association Vs. CST Ahmedabad reported in 2009 (14) STR 269 (Tri. – Ahmd.) and Adarsh Realty & Hotel Pvt. Ltd. Vs. CST Bangalore reported in 2010 (17) STR 569 (Tri. – Bang.), pre-deposit was ordered. Therefore it cannot be said that the appellants have been able to make out a strong prima-facie case in their favour. Further as already observed, the services provided by the appellants are clearly covered by the definition of the taxable services under Section 65(25)(a). According to this definition, “club or association” means:-

“Any person or body of person providing services, facilities or advantages, for a subscription or any other amount, to its members, but does not include-

(i) anybody 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 objectives 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.”

3. After considering the various submissions, we find that the appellants are covered by the definition of club or association and the activities also are covered by taxable service. No evidence showing acute financial difficulty has been placed before us. In view of the above, balance of convenience requires that appellant should be required to deposit a portion of the amount. Accordingly we direct the appellant to deposit 25% of the service tax demanded within twelve weeks and report compliance on 06.06.11. Subject to deposit of the amount mentioned above, the requirement of pre- deposit of the balance dues is waived and stay against the recovery of the same is granted.

(Pronounced in Court)

NF

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