CENTRAL EXCISE ACT, 1944

Section 11B

Refund - Service tax wrongly paid - Allowability -

Assessee-company entered into an 'Agreement of Joint Venture' with another company for running its club on 'Revenue-Sharing Basis'. It paid service tax considering the said leasing activity as Renting of Immovable Property Service. Thereafter, the assessee filed a refund claim of tax so paid on the ground that lease of club (business) would not fall in the meaning of word 'immovable property' under section 65(105)(zzzz). Revenue rejected the said refund holding that the club leased by the assessee would fall in the definition of immovable property, inasmuch as the club provided miscellaneous service to only its members and its guests as a multiple use building and was not akin to a hotel. Held: From perusal of Agreement of Joint Venture, it was clear that the assessee-company and the other company intended to do the business of running of club on principal-to-principal basis. Further, the assessee did not deliver the possession of club by way of tenancy but only gave the right to manage and operate the club for their mutual benefit, on principle-to-principle basis. Accordingly, the provisions of service tax would not be attracted. Hence, Revenue was directed to grant refund of service tax, which was wrongly paid by assessee under Renting of Immovable Property Service.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

CENTRAL EXCISE ACT, 1944

Section 11B

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