2008 (7) TMI 279 - AT - Service Tax

Appellant contend that services, such as management advice, group auditing, financial planning and business guidance etc. has been treated as a single service, namely that of a security agency by adjudicating authority second contention of is that they are not a commercial concern held that Circular No. 86/4/2006-S.T. is prima facie not applicable to the applicants, as circular issued in context of liability of IITs or IIMs charging fee for campus interviews stay is granted partly

Summary

Issues:
1. Whether the applicants were correctly charged service tax for security agency services.
2. Whether the applicants' additional services should be considered separate from security agency services.
3. Whether the applicants qualify as a commercial concern for service tax purposes.

Analysis:
1. The applicants contested the imposition of service tax amounting to Rs. 59,40,500 for security agency services, arguing that they also provided other services like management advice, group auditing, and business guidance. However, the adjudicating authority treated all services as one, namely security agency services. The applicants estimated the service tax for security agency services at around Rs. 14 lakhs.

2. The applicants claimed they were not a commercial concern as they operated on a no profit no loss basis. They cited a CBEC Circular stating that service tax on commercial concerns cannot be levied if the primary aim is not profit. The Circular, however, was deemed inapplicable by the tribunal as it pertained to educational institutes not primarily focused on profit-making activities.

3. Considering the arguments presented, the tribunal directed the applicants to pre-deposit Rs. 15,00,000 towards service tax within eight weeks. Upon this deposit, the pre-deposit for the remaining tax and penalties would be waived, and recovery stayed pending the appeal. Failure to comply would lead to the vacation of stay and dismissal of the appeal without prior notice.

4. The compliance deadline for the deposit was set for September 29, 2008. The decision was pronounced in court by Vice-President Ms. Jyoti Balasundaram.