COMMISSIONER OF SERVICE TAX Vs. DELHI GYMKHANA CLUB LTD.

JUDGEMENT

(1.) THE appellant, namely, Commissioner of Service Tax, has preferred this appeal under Section 35 of the Central Excise Act, 1944 (hereinafter referred to as the Act). The impugned orders are passed by the Custom Excise & Service Tax Appellate Tribunal (for short, CESTAT"). Learned Counsel, who appeared for the respondents in CEAC No. 5/2007 challenged the maintainability of this appeal. Though nobody appeared for the respondents in the other appeal, since the question is about the maintainability of the appeal and the issue involved is the same, which is common to both the appeals, we took up both the appeals together. However, for the sake of convenience, we will take note of facts as they appear in CEAC No. 5/2009.

(2.) THE respondent in this case is Delhi Gymkhana Club Limited. It was served with three show -cause cum demand notices dated 24.6.2002, 3.7.2003 and 18.5.2004 respectively. Service tax in the sum of Rs. 22,93,564/ -, along with interest payable till the date of its demand under Sections 73 and 75 of the Act, was demanded by these show -cause notices. Penalty under Sections 75A, 76, 77 and 78 of the Act was also proposed. The respondent submitted reply to these show -cause notices challenging the proposed move on the ground that no such service tax was payable by the respondent club as it is the members of the club who were using the facility and there was no such question of providing services by the members to themselves. The Assistant Commissioner, Service Tax Division I, New Delhi, however, did not agree with the aforesaid contention of the respondent and passed orders dated 18.5.2005 confirming the demand of Rs. 22,93,564/ - with interest and also imposed penalties. Being aggrieved with the aforesaid order in original, the respondent preferred appeal to the Commissioner (Appeals), Delhi I. The appellate authority accepted the contention of the respondent and set aside the order in original by allowing the appeal of the respondent vide orders dated 25.8.2006. The appellant herein did not accept this order and challenged the same before the CESTAT. However, it has remained unsuccessful in its challenge as CESTAT has dismissed the appeal of the appellant on 13.6.2008. The Tribunal has noted in the impugned order that the Commissioner (Appeals) followed the judgment of the Calcutta High Court in the case of Dalhousie Institute v. Asstt. Commissioner, Service Tax Cell reported in : 2006 (3) STR 311 as well as in the case of Saturday Club Ltd. v. Asstt. Commissioner, Service Tax Cell : (2006) 3 STR 305. The Tribunal was of the opinion that the Commissioner (Appeals) rightly held that when the service is provided by a club to its members, it does not attract service tax, as held by the Calcutta High Court in Dalhousie Institute (supra) as under:

(3.) AS mentioned above, the present appeal is preferred under Section 35 of the Act. This section reads as under: