TMI Blog2023 (9) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... rovider s contention that they are not commercial concern cannot be accepted and hence they are liable to pay the service tax w.e.f 16.6.2005 onwards. As regards period after 1.5.06, the society is liable to pay service tax within the meaning of Person included in the definition in the statute. There are no reason to interfere with the detailed and considered decision given by the Adjudicating Authority - appeal filed by appellant dismissed. - MR. R. MURALIDHAR, MEMBER (JUDICIAL) AND MR. A.K. JYOTISHI, MEMBER (TECHNICAL) None for the Appellant. Shri A. Rangadham, AR for the Respondent. ORDER No one is present on behalf of the Appellant. During the last hearing on 10.08.2023, it was made clear that if the Appellant does not appear during the next Hearing, the appeal will be disposed off ex-parte. As the appeal pertains to the year 2012, we have taken up the same and perused the documents with the help of Learned AR. In this case, the allegation is that the Appellant, who is registered as a Society, has provided Manpower Recruitment or Supply Agency services to ONGC during the period 2005-06 to 2009-10. After due process, the Adjudicating Authority has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy, they fall within the definition of manpower recruitment or supply agency [section 65(68)] and are liable to service tax . In the present case also, it is observed that the contract workers payrolls are being maintained by the service provider and statutory obligations of the contract workers are being discharged by the service provider only. M/s ONGC is paying the wages along with statutory obligations pertaining to the workers engaged for the work to the service provider only but not to each contract worker. The contract workers deployed by the service provider is on the pay rolls of the service provider and the service provider discharges all the statutory obligations like PF, ESI etc. It is also evident from Para II at page No. 3 of the agreement entered with M/s ONGC Limited for job contract works of miscellaneous and intermittent nature that the service provider is engaged in supply of manpower to M/s ONGC. Further, under Para VI at page 6 of the said agreement, it was clearly mentioned that the Service Provider shall deploy the members for doing jobs / performing services. From the above observation, I find that the activities rendered by the service provider are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tur and Co. Ltd. vs Union of India (reported vide 2006 (4) STR 3 (Cal)) has stated the following: Section 65: The definitions: Scheme and context: 12. In order to ascertain the situation, the principles of interpretation have to be followed. The court in order to construe the definition comprehensively may apply the golden rule of interpretation according to the ordinary grammatical meaning having regard to the scheme of definitions and in the context of the provisions contained in the statue. And the object and purpose for which it was enacted. It is apparent that the expressions person , concern or commercial concern have been used to define all other assessees liable to pay service tax except section 65(13) defining consulting engineer . The Word person as defined in section 3(42) of the General Clauses Act includes an individual, a company or an association of persons. A person includes a juristic person. (emphasis provided) A company is a juristic person and therefore would be no difficulty to include a company when the definition uses the expression person . Similarly, a concern without any qualification can include any business or professional establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under :- The definition of charitable purpose in that clause is at present so widely worded that it can be taken advantage of even by commercial concerns which, while ostensibly serving a public purpose, get fully paid for the benefits provided by them, namely, the newspaper industry, which while running its concern on commercial lines, can claim that by circulating newspapers it was improving the general knowledge of the public. In order to prevent the misuse the definition in such cases, the Select Committee felt that the words not involving the carrying on of any activity for profit should be added to the definition. The above observations of the Hon ble Supreme Court, though with regard to the scope of the term charitable purpose , also throw light on the question as to what is a commercial concern and according to the above-mentioned observations of the Hon ble Supreme Court, a commercial concern is the one which get fully paid for the services provided by it. Therefore, in our view, the test for determining as to whether a concern is a commercial concern would be as to whether it charges fully commercial price for the goods or services sold by it and monit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch new tax shall be reimbursed by ONGC to society in addition to the price of the services as specified in sub clauses (ii) and (iii) hereof above. In clause XXIX of the contract it is provided that the responsibility of the payment of all taxes is with the society only. The above clauses of the agreement clearly speak about the responsibility of the service provider to pay all the taxes to the government. Further, I observe that the service provider has been providing the said services from the year 2005 onwards. 26. Further, on verification of the case records, it is seen that certain amounts received prior to 16.06.2005 i.e., introduction of service tax on supply of manpower against services previously provided have been included in the notice. The details of the same are as follows: Month of provision of service Dt of Receipt Value of Service ST Amount Ed. Cess Amount Remarks April 2005 12.05.05 9,74,372 97.437 1,949 Shown against May 2005 May 2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egory of Manpower Recruitment or Supply Agency Service for the period from 16.06.2005 to March, 2010, under Section 73(2) of the Finance Act, 1994; b) I confirm the demand of interest on the service tax amount as mentioned at (a) above under Section 75 of the Finance Act, 1994; c) I impose penalty of Rs.50,000/- under Section 77(1) of the Finance Act, 1994 for failure to get registered themselves under section 69 of the Finance Act, 1994 read with Rule 4 of the Service Tax Rules, 1994 under the category of Manpower Recruitment or Supply Agency services ; d) I impose penalty of Rs.5,000/- under Section 77(2) of the Finance Act, 1994 for failure to file returns as required under section 70 of the Finance Act, 1994; and e) I impose penalty of Rs.91,03,830/- under Section 78 of the Finance Act, 1994; f) Under first proviso to section 78 of the Finance Act, 1994, the penalty imposed at (e) above, stand reduced to twenty five percent of the service tax determined, in case the service provider pays the entire service tax determined under Section 73 of the Finance Act, 1994 along with interest under Section 75 ibid and the reduced penalty of twenty five percent, within th ..... 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