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TMI Blog2018 (8) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Act, fall outside the purview of either the definitional or enumerative provision of the Act - Accordingly, this issue is decided in favor of the appellant and against the Revenue. Online information and data base access or retrieval services - services received from abroad - Whether the appellant have received online information and data base access or retrieval services from abroad, whether the same is taxable? - Held that:- The liability of tax arises only if ‘online information and data access or retrieval service’ are received by the recipient located in India “for use in business or commerce” - the OIDA service received by the appellant is not in relation to any business or commerce and accordingly the same is not taxable - further, it is found that such service was received by the appellant as a representative of all the educational institutions and as such also, they are not liable to service tax. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... s into subscription agreement with the resource owner. Sample copies of subscription agreement are enclosed. (4) Entertaining a view that the appellant is receiving Online Information and Database Access or Retrieval Services (for short 'OIDA Service') from the overseas vendors, proceedings were initiated against the appellant proposing demand of service tax under reverse charge. (5) Further, the appellant collects 'Training and Placement Charges' from its students as a part of the fee structure on which demand was proposed under the category of manpower supply services (for short 'MPS'). (6) Another demand of ₹ 7,626/- on account of short-payment of tax was also proposed for the period from October, 2004 to March, 2008. (7) The proceedings were initiated vide three show cause notices, as summarized above, which were adjudicated vide the impugned order. The appellant has preferred the present appeal against the impugned order. SCN dated Period Service Tax OIDA services Manpower services Short-payment 23.04.2010 October, 2004 to September, 2009 6,41,81,583/- 2,23,888/- 7,626/- 19.04.2012 October, 2009 to March, 2011 4,21,82,879/- Nil Nil 05.10.2012 April, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tituent member. 9. Thus, where the distributor or sub-distributor or area distributor enters into an arrangement with the exhibitor or theatre owner, with the understanding to share revenue/profits and not provide the service on principal-to-principal basis, a new entity emerges, distinct from its constituents. As the new entity acquires the character of a "person", the transactions between it and the other independent entities namely the distributor/sub-distributor/area distributor and the exhibitor etc. will be a taxable service. Whereas, in cases the character of a "person" is not acquired in the business transaction and the transaction is as on principal-to-principal basis, the tax is leviable on either of the constituent members based on the nature of the transaction and as per rules of classification of service as embodied under Sec. 65A of Finance Act, 1994." [Emphasis supplied] 6. Reliance is also placed on decision of Hon'ble Supreme Court in Gammon India Limited v. Commissioner, 2011 (269) E.L.T. 289 (S.C.), wherein, in the context of import whether by the joint venture or the constituent thereof, it was held as under: "18. In short. New Horizons (supra) recognises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an import by M/s. Gammon-Atlanta JV, "a person" who had been awarded contract for construction of the roads in India and therefore, neither Gammon Atlanta JV nor Gammon fulfill the requisite requirement stipulated in Condition No. 38 of the Exemption Notification No. 17/2001-Cus., dated 1st March, 2001." [Emphasis supplied] 7. In view of the above, it is submitted that the liability to pay tax cannot be fastened on the appellant as the appellant is not the service recipient of alleged services. In fact, the whole impugned proceedings are vitiated in as much as the same have been instituted against the appellant, which is not the service recipient. The confirmation of demand in the impugned order is liable to be set aside on this ground alone. In any case, assuming without admitting that the appellant has received the alleged OIDA services, the same are not chargeable to service tax. 8. Without prejudice to the above and assuming without admitting that the appellant has received the alleged OIDA services, it is submitted that the said services are not chargeable to service tax. 9. It is to be noted that the levy of service tax on services received from abroad in hands of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial activities, having profit as the primary aim. It is not one/few isolated activities which determine whether or not an institution is a commercial concern. It is the totality of its activity and the objective of its existence that determines the commercial nature of an institution as an 'entity' or a 'concern'. The principal activity of institutes like IITs or IIMs is to impart education without the objective of making profit. Therefore, these institutes cannot be called a commercial concern, even if on some of their activities (like holding campus interviews), they charge fee. Accordingly, these institutes were not liable to pay service tax prior to 1-5-2006 under the category of "manpower recruitment or supply service". As regards the period after 1-5-2006, decision should be taken after taking into account all material facts on case to case basis." [Emphasis supplied] 15. Reliance is also placed on the following decisions: * Circular No. 80/10/2004-ST, dated 17/09/2004 * Commercial Tax Officer v. Banasthali Vidyapith, 2015 (79) VST 282 (Raj) * Cochin Port Trust v. State of Kerala, 2015 (80) VST 341 (SC) * Commissioner v. Sai Publication Fund, AIR 2002 SC 1582 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice was proposed on the incorrect factual assumption that the said placement charges were received by the appellant from recruiter companies; however, the confirmation of demand in the impugned order is based on the fact that the same were received by the appellant from its students. Such confirmation of demand in the impugned order, being beyond the scope of show cause notice, is liable to be set aside on this ground alone. 21. In any case, considering the undisputed factual position now, that the placement charges are received from students, it is submitted that the appellant is not liable to pay tax under MPS services. 22. At the outset, it is submitted that the appellant is an educational institution and not a manpower recruitment or supply agency and cannot be said to be rendering MPS services. 23. Further, the appellant receives alleged „Training and Placement Charges‟ from its students as a part of the fee structure. The student has to pay such charges to the appellant irrespective of whether he participates in the recruitment process of the appellant. These charges are received from the student as a part of the fee structure and are not paid by a stud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended period cannot be invoked and penalties cannot be imposed. 31. Without prejudice to the above, it is submitted that the appellant was under a bonafide belief that it is not liable to pay service tax on alleged services. The bonafide view of the appellant is endorsed by various decisions referred to hereinabove. The impugned order has confirmed presence of suppression on part of the appellant merely on the ground of non-payment of tax. Thus, extended period of limitation cannot be invoked. 32. It may be noted that the Adjudicating Authority has extended the benefit of Section 80 to the appellant for waiver of penalties on ground of bonafide belief about non-taxability. The said findings are undisputed. When it is undisputed that the appellant was under bonafide belief about non-taxability, it does not appeal to reason how the appellant can be said to have suppressed any facts. In such a case, thus, invocation of extended period of limitation is not sustainable on the basis of undisputed findings. The confirmation of demand in the impugned order as pertaining to (a) the period from October, 2004 to September, 2008 under show cause notice dated 23/04/2010, and (b) the period f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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