IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, KOLKATA REGIONAL BENCH – COURT NO.2 (Arising out of Order-in-Original No. 27/COMMR/ST-II/KOL/2016-17 dated 24/06/2016 passed by Commissioner of Service Tax-II, Kolkata)

M/s. Calcutta Club Ltd.

(241, A. J. C. Bose Road, Kolkata-700 020)

Appellant VERSUS Commr. of Service Tax-II, Kolkata (180, Shanti Pally, Rajdanga Main Road, Kolkata-700107)

Respondent APPEARANCE :

Shri Pulak Kumar Saha & Shri J. Bhattacharya, both CA for the Appellant Shri S. Dey, Authorized Representative for the Respondent CORAM:

HON’BLE MR. R. MURALIDHAR, MEMBER (JUDICIAL)

HON’BLE MR. K. ANPAZHAKAN, MEMBER (TECHNICAL)

FINAL ORDER NO.76489/2025 Date of Hearing : 7^th May 2025 Date of Pronouncement : 10.06.2025 PER R. MURALIDHAR The appellant is a members-only club, registered as a Public Limited Company under the Companies Act, 1956. Proceedings were initiated demanding Service Tax in respect of various services being provided by them. After due process, the Adjudicating authority confirmed the demands along with interest and penalty. Being aggrieved the appellant is before the Tribunal.

2. The Ld Consultant appearing on behalf of the appellant, submits the details of the confirmed demand under various categories which is as under:

i. Service Tax Liability of Rs. 57,24,877 under Restaurant Service ii. Service Tax liability of Rs. 8,87,249 on Rent Hoarding and Royalty Income for the FY 2008-09 to 2012-13 under Renting of Immovable Property Service provided to M/s. Calcutta Street Advertising Pvt. Ltd. and M/s. Ganesh Departmental Stores. In this regard, the Appellant has paid the Service Tax Liability of Rs. 2,40,900 in respect of M/s. Ganesh Departmental Stores which was ordered to be appropriated.

iii. Service Tax liability of Rs. 2,49,342 was confirmed in respect of Advertising Agency Service provided by the Appellant by way of display of advertisements/banners.

3. In respect of the confirmed demand on account of Restaurant Service, the arguments of the Ld Consultant is as under :

3.1 The Appellant submits that the primary objective of the club is to provide its members with privileges, advantages, conveniences, and accommodations of a club. The facilities of the club are exclusively for its members, their spouses, and guests accompanied by members. No outsider is permitted to use the club‟s facilities. No person other than a member or guest accompanied by a member or his/herspouse can use the facilities of the club. No outsider is permitted to use the facilities of the club.

3.2 The Appellant submits that their dining rooms belong to its members and it is only the Appellant‟s members and their accompanying spouses and guests who visit such dining rooms. The Appellant submits that the dining rooms are used by the club members according to the bye-laws of the club made by the members themselves. The Appellant submits that the club dining rooms cannot under any circumstances be treated as public eating place nor can the members of the club, to whom the dining rooms belong, be treated as members of the public in relation to such dining rooms. The Appellant states that the club dining rooms cannot be treated as restaurants and no service tax can be imposed.

3.3 The restaurant service under clause (zzzzv) of Section 65(105) of the Finance Act, 1994 was introduced under taxable service category with effect from 01.05.2011. As per the definition of Taxable service provided in the said clause is reproduced below for reference:

“taxable service means any service provided or to be provided to any person, by a restaurant, by whatever name called , having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has license to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises.”

3.4 Therefore, the basic contention of introduction of taxable service by the exchequer is to levy service tax on restaurants