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2020 (6) TMI 618 - AT - Service TaxDemand of Service Tax - Photography services - Scientific and technical consultancy services - scope of SCN - Time Limitation - penalties - HELD THAT:- Although the appellant obtained registration under three categories of services the demand in this SCN is only under the heads of ‘Photography services’ and ‘Scientific and technical consultancy services’. Photography Services - the assessee’s contention is that the nature of the services does not fall in the definition of ‘Photography services’ at all - HELD THAT:- The scope of this service has been enlarged to cover the service rendered by any person instead of services rendered only by a commercial concern only. The nature of the services rendered by the appellant are photo processing of aerial films, general photography, photography by low level flying aircrafts specially suited for the purpose etc. - all these services squarely fall under the definition of ‘Photography service’ as per Chapter V of the Finance Act, 1994. Legal entity of NRSC - Nature of Organisation - Whether NRSC is a commercial concern or just another legal person? - HELD THAT:- It is found from the narration of the nature of the organisation in the SCN, impugned order and in the submissions made by both the parties that it is an autonomous organisation of the department of Space, Government of India. It is not primarily a commercial concern like any public sector undertaking. It is registered as a Society under the Societies Registration Act. Therefore, it is a legal entity and is a juridical person but is definitely not a commercial concern - Having said that, the services rendered by them, for other organisations are in the nature of services in return for a payment. To that extent the nature of the activity is certainly commercial but the organisation itself is not. Therefore, prior to 01.07.2012 the assessee cannot be charged service tax on photography services rendered by them. After this date, the service tax can be charged from the assessee. Scientific and technical consultancy Services - HELD THAT:- The supplier of such goods and the provider of such services is quite distinct from the person receiving the grants-in-aid. Such persons will not automatically get exempted from payment of service tax or excise duty unless there is a specific exemption notification in respect of such services. For instance, if a department receives grant-in-aid, say, to construct roads, the amount received is a grant-in-aid at the hands of the department. However, in order to build those roads, they will hire other contractors and pay them. At the hands of the contractors who provide necessary services, the amounts are commercial receipts for their services. Therefore, the same cannot be treated as grants-in-aid at the hands of the contractor - The nature of these services, as can be seen from the records available, clearly indicates that they are in the nature of scientific and technical consultancy provided by the expertise of the assessee. Extended period of Limitation - suppression of facts or not - HELD THAT:- The assessee in this case is an autonomous organisation under the department of Space, Government of India. It is not a private business entity. They have, of course, undertaken several research projects for a price and that is part of their revenue model. They generate funds from these projects which are used for running the organisation. For these projects, they get paid by other Governmental and non-Governmental organisations under various heads. If the assessee was clearly aware that they had to pay service tax, they could have billed their clients for the Service Tax as well. By not paying the service tax, the assessee is not gaining anything. It is a Governmental organisation run by bureaucrats and scientists, none of whom have any personal interest in evading service tax. In fact, by evading service tax nothing would be gained either by anyone individually or by their organisation - by no stretch of imagination can we hold that the assessee has committed fraud or collusion or wilful misstatement or suppression of facts with an intent to evade payment of service tax. Under these circumstances, the extended period of limitation cannot be invoked in this case. The demand, if any, within the normal period of limitation can only survive. Penalties - HELD THAT:- There is no evidence of wilful suppression of facts with intent to evade payment of service tax, no penalty is imposable under section 78 of the Finance Act, 1994. This a fit case to invoke section 80 of the Finance Act, 1994 and waive all the penalties imposed upon the appellant. Appeal allowed by way of remand.
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