ORDER
R.K. Abichandani, J. (President)
1. The Revenue challenges the order of the Commissioner (Appeals) made on 26.09.2006 by which the order-in-original confirming demand of Rs. 38,267/- of Service Tax, imposing penalty of like amount under Section 76 of the Finance Act, 1994, imposing penalty of Rs. 40,000/- under Section 78 of the said Act, and ordering recovery of interest of Rs. 38,267/-, was set aside.
2. A show cause notice was issued on 15.12.2005 to the respondent, Anubhagya Welfare Society, for not paying Service Tax in respect of taxable service under the category of ‘Cable Operators Services’. According to the Revenue, the assessee received from its members one time security deposit of Rs. 500/-, which was later on adjusted and utilized as additional collection for providing taxable services over and above charging regular amount of Rs. 50/- per member per month upto March, 2003, which was raised to Rs. 60/- per member per month from April, 2003 to March, 2005. A total amount of Rs. 1,60,000/- was adjusted as additional amount charged for providing Cable Operators Services.
2.1 According to the assessee, it was a Welfare Society registered under the Rajasthan Societies Act with an object to provide facilities to the residents of the colony for the purpose of general welfare; for hygienic living; for social cultural and educational activities; and to school going children etc. The colony dwellers were provided cable television facility for which members were charged separately. According to the respondent, it was not engaged in the business of providing Cable Operators Services.
3. The Deputy Commissioner, on the basis of the material on record, came to a finding that, Cable Operators Services were provided to the members who subscribe the monthly amount for receiving the service. The gross amount charged for providing Cable Operators Services was not disclosed. The tax was, therefore, ordered to be recovered and penalties imposed. The Commissioner (Appeals) was, however, of the view that the activities of the Society were not for the purpose of making money or for any commercial consideration, and that it was a welfare society. Moreover, there was no mutuality as the Society did not provide any service to non-members. Reliance was placed on the decision of the Hon’ble High Court of Calcutta in Dalhousie Institute v. Assistant Commissioner, Service Tax reported in 2005 (180) ELT 18 (Cal), for holding that no Service Tax was leviable. The learned Single Judge of the Hon’ble Calcutta High Court held that, the facility of use of the premises by the club to its members cannot be termed to be a letting out. Moreover, the members were not clients of the club. In Saturday Club Ltd. v. Asstt. Commissioner, Service Tax Cell, Calcutta , the learned Single Judge of the Hon’ble Calcutta High Court held that, members and club both are same entities.
4. The learned authorised representative of the Department, strongly contended that, a cooperative society was a “person” and, therefore, it could be a ‘Cable Operator’ and can provide service to any person, after the amendment by Section 90 of the Finance Act, 2004, who can be its members also. It was submitted that, there was no exemption given to the Welfare Society under the Act. In the present case, subscription was regularly charged for the services provided and, therefore, the provisions of the said Act were attracted.
5. It appears from the record that, the respondent Society was a Society registered under the Rajasthan Societies Act and giving facility to its members by providing ‘Cable Services’ under Section 65(105)(zs) to a customer (to “any person” after the amendment from 10.09.2004) in relation to cable services. The word ‘Cable Operator’ is defined under Sub-section (21) of Section 65 and the expression has the meaning assigned to it in Clause (aa) of Section 2 of the Cable Television Networks (Regulation) Act, 1995. The expression ‘Cable Service’ has a meaning assigned to it in Clause (b) Section 2 of that Act as provided by Section 65(22) of the Finance Act, 1994. Therefore, if the society is a “Cable Operator” and provides cable services as understood under the said Act to a customer, and now to “any person”, it would be providing taxable service so as to attract the provisions of the said Act. It appears from the impugned order that, the Commissioner (Appeals) has not considered the provisions of the Cable Television Network (Regulation) Act, 1995, under which no person shall operate a cable television network unless registered as a “Cable Operator” under the Act, nor has he examined whether the society was registered as a cable operator to legitimately operate a cable television network. The Commissioner (Appeals) has also not examined the provisions of the Rajasthan Societies Act under which the respondent is said to have been registered. He has also not examined the amendment in Clause (zs) of Section 65(105), which is noted hereinabove. The matter is, therefore, required to be remanded to the Commissioner (Appeals) for its fresh consideration.
6. The impugned order is, therefore, set aside and the matter is remanded to the Commissioner (Appeals) with a direction to take a fresh decision after hearing both the sides, expeditiously, preferrably within four months from the date of the receipt of this order. The appeal is accordingly allowed by way of remand.
(Dictated & pronounced in the open court)