M/S. Gujarat State Federation Of Co. Op. ... vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-118/2008/AHD-III/CE/KCG/COMMR-(A) dated 30.09.2008, passed by Commissioner (Appeals) Central Excise & Service Tax, Ahmedabad)

M/s. Gujarat State Federation of Co. Op. Sugar Factories Ltd. : Appellant (s)

VERSUS

Commissioner of Central Excise & S.T., Ahmedabad : Respondent (s)

Represented by :

For Appellant (s) : Shri P.M. Dave, Advocate For Respondent (s) : Shri J. Nair, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Hon'ble Member (Technical)

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Hon'ble Member (Technical)

Date of Hearing / Decision : 13.10.2015

ORDER No. A/11498/2015 Dated 13.10.2015

Per : Mr. P.K. Das;

After hearing both the sides and on perusal of the records, we find that the demand of service tax was proposed for rendering services of Clubs or Associations Membership Services. The appellant is Gujarat State Federation of Co-operative Sugar Factories Limited (in short Federation) collecting subscription from their members during the period 2005-06. The adjudicating authority confirmed the demand of tax alongwith interest and imposed penalty under the category of Club or Association Services under the provisions of Section 65(95a) of the Finance Act, 1994. The Commissioner (Appeals) upheld the adjudication order.

2. On perusal of the impugned order passed by the Commissioner (Appeals), we find that the appellant was collecting subscription from their members of the Federation and therefore, the Federation is covered under the ambit of Clubs or Association Membership Services under the provisions of Section 65 of the Finance Act, 1994. This issue is no more res-integra in view of the following decisions of the Hon'ble Gujarat High Court and the Tribunal:-

(a) Sports Club of Gujarat Limited vs. UOI  2013 (31) STR 645 (Guj.)

(b) Green Environment Services Cooperative Society Limited vs. UOI  2014 (0) GLHEL-HC 231013

(c) M/s. Federation of Surat Textile Traders Association vs. UOI  Order dated 30.09.2015 in SCA No. 4171 of 2011

(d) M/s. Sanjayraj Hotels & Resorts Pvt. Limited vs. CCE Rajkot  Order No. A/10662/2015 dated 20.04.2015.

3. The Hon'ble Gujarat High Court in the case of Sports Club of Gujarat Limited vs. UOI (supra), held as under:-

7.1?Learned advocate for the Department also submitted that there is no question of mutuality because the club is a legal entity as it is incorporated under the Companies Act. This Court is unable to accept the submissions made by learned advocate for the Department because they were the very facts before the Division Bench for consideration and learned advocate for the Department could not set out any convincing grounds on which this Court should not follow the decision of the Division Bench of Jharkhand High Court.

8.?In the result, these petitions are allowed and it is hereby declared that Section 65(25a), Section 65(105)(zzze) and Section 66 of the Finance (No. 2) Act, 1994 as incorporated/amended by the Finance Act, 2005 to the extent that the said provisions purport to levy service tax in respect of services purportedly provided by the petitioner club to its members, to be ultra vires. Rule is made absolute with no order as to costs.

4. In the case of Surat Textile Traders Association vs. UOI, the Hon'ble Gujarat High Court, vide judgment dated 30.09.2015 in Special Civil Petition No. 4171 of 2011, held as under:-

5. The controversy involved in the present case lies in a very narrow compass, inasmuch as, the petitioners seek to challenge the impugned show-cause notice dated 3rd August, 2010 (Annexure J to the petition) qua M/s. J.J. Air-conditioned Textile Market Association only to the extent the same seeks to invoke the provisions of section 65(105)(zzze) of the Finance Act. This court in the case of Sports Club of Gujarat Ltd. vs. Union of India (supra) has agreed with the view taken by the Jharkhand High Court in Ranchi Club Limited vs. Chief Commissioner of Central Excise & S.T., Ranchi Zone, 2012 (26) STR 401 (Jhar.) and has held sections 65(25a), 65(105)(zzze) and section 66 of the Finance Act, 1994 to be ultra vires and beyond the legislative competence of Parliament. The above decision in the case of Sports Club of Gujarat Ltd. v. Union of India has been followed by this court in the case of Green Environment Services Cooperative Society Limited vs. Union of India. (supra). While it is the case of the respondents that against the above decisions, appeals have been preferred before the Supreme Court, nothing has been pointed out to show that such appeals are admitted or that any interim relief has been granted therein. Under the circumstances, the controversy involved in the present case, to the extent the respondents seek to invoke the provisions of section 65(105) (zzze) of the Finance Act qua the members of the petitioner, stands concluded by the above decisions of this court wherein the said provision has been declared ultra vires and unconstitutional and hence, to that extent the impugned show cause notice is without authority of law and, therefore, cannot be sustained.

6. For the foregoing reasons, the petition partly succeeds and is accordingly allowed to the following extent. The impugned show-cause notice dated 3rd August, 2010 issued under section 73(1) of the Finance Act, 1994 is hereby quashed and set aside to the extent the same seeks to invoke the provisions of section 65(105)(zzze) of the Finance Act qua the noticee therein. Rule is made absolute accordingly to the aforesaid extent with no order as to costs.

5. In the present case, both the authorities below observed that the appellant collected subscription from their Members. Hence, the above decisions are squarely cover the issue involved in the present appeal. In view of that, the impugned order cannot be sustained. The appeal filed by the appellant is allowed with consequential relief.

(Dictated and pronounced in the open Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial) ..KL

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