2008 (9) TMI 199

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....erest on tax has also been demanded. The major part of the demand is on the amount of commission received by the appellants (hereinafter called the 'race club') from 'bookmakers' during the above period. The mechanism of transactions between the race club and the bookmakers is easily discernible from a judgment of the Hon'ble Supreme Court (copy available on record) which was passed in the case of Dr. K.R. Lakshmanan v. State of Tamil Nadu. The relevant part of the judgment is extracted below:- 'We may at this stage notice the manner in which the club operates and conducts the horse races. Race meetings are held in the club-race courses at Madras and Ooty for which the bets are made inside the race course premises. Admission to the race ....

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....maining 5 per cent is retained by the club as commission. Similarly, the Book Makers collect from their punters, besides the bet amount specified in the betting card, 20 per cent bet-tax payable to the State and 5 per cent payable to the club as its commission. It is thus obvious that the club is entitled to only 5 per cent as commission from the tote-collections and also from the total receipts of the Book Makers. According to the appellant the punters who bet at the totalizator or with the Book Makers have no direct contract with the club. The club pays from its own funds the prize money (stake-money) to the winning horses. The horses who win the first, second, third and up to 5th or 6th place are given prizes by the club. The club inc....

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....unsel, that the service rendered by the race club to bookmakers, for which commission was received by the club, is not covered by the above definition. The JCDR has contested this plea. On a perusal of the records, we note that, neither the show-cause notice nor the adjudicating authority has specified or paticularised the subject service for its classification under section 65(104c). The nature of service which is discernible from the Apex Court's judgment also does not seem to be befitting the definition of "support services of business or commerce". The appellants have thus made out prima facie case against the demand of service tax on the commission received by the race club from book makers. Another part of the demand is on the amount ....