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TMI Blog2006 (4) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rs. 16,63,780/-. 2. The appellant is an educational institution registered as a society under the Societies Registration Act, 1960. The institute periodically conducts Campus Recruitment Programme in which various business organisations participate and select the candidates for employment in their organisations. The institute collects fee from the companies for participation and for recruitment of the candidates separately. It appeared that the activity undertaken by the IIMB is covered under "Manpower Recruitment Agency" attracting Service Tax under the provisions of Finance Act 1994. Therefore, a show cause notice dated 8-4-2005 was issued to the appellants demanding Service Tax of Rs. 15,89,065/- for the period from October 1999 to D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition of Man Power Recruiting Agency" and finally concluded that IIMB is liable to pay Service Tax under the aforesaid category and accordingly confirmed the demand with interest. However, no penalty was imposed on the ground that IIMB had reasonable cause for failing to pay service tax. The adjudicating authority also held that since the appellants are registered as Management Consultants under the Service Tax provisions they should have been registered under the category of Manpower Recruitment Agency also. 4. The appellants in their appeal mainly contended that they are not a commercial concern; that the activity of facilitating recruitment on their campus through campus interview are only incidental and ancillary services for attain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 6. Section 65(68) of the Finance Act, defines a Manpower Recruitment Agency as follows. "Manpower Recruitment Agency" means any commercial concern engaged in providing any service directly or indirectly in any manner for recruitment of manpower to a client." 7. From the definitions it is clear that the Agency rendering the service must be a Commercial Concern and must be engaged in providing any service connected with manpower recruitment to a client. 8. Though the word "Commercial Concern" is used in case of several services such as Advertising Service, Manpower Recruitment Service, Market Research Service the words commercial concern is not defined in the Finance Act, 1994. The Adjudicating Authority extracted the definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is very clear that the commercial concern must be engaged in trade or commerce. The appellants at page 10 of the appeal provided a definition of expression "commercial" extracted from various law lexicons which are as follows • "Bakshi's - The Law Lexicon - 2005 Edition-defines the term "commercial" as relating to trade and commerce in general and as a concern having profit as its primary aim. • SC on Words and Phrases - 2004 Edition by J.R.P. Sethi - defines "Commercial" as of, engaged in, or concerned with, commerce and having profit as its primary aim rather than artistic etc., • Black's Law Dictionary - Sixth Edition - "Commercial" relates to or is connected with trade or traffic or commerce in general, is occupied with busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndian Institute of Management which is solely engaged in imparting education and at times facilitates recruitment on their campus through interviews which is incidental or ancillary to their main objective cannot be called as a commercial concern, as they are not engaged in trade or commerce. Further the essence of trade or commerce viz., the profit motive. No commercial concern does the business for the sake of business without a profit motive. The case law cited by the appellants in the case of Deputy Commissioner v. South India Textile Research Association and State c Tami! Nadu v. Cement Research Institute are very much relevant and the ratios of decisions rendered are squarely applicable to the appellants case. 12. In view of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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