9911796707
TMI Blog2011 (9) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal is more or less identical, for the sake of easy reference, the facts as available in appeal No. 481/06, in the case of Bhootpurva Sainik Society are being detailed. 3. The said appellant, i.e. M/s. Bhootpurva Sainik Society is an association of ex-servicemen, registered under the Societies Registration Act, 1860 engaged in activities for the welfare of ex-servicemen. These include assisting the ex- service men in finding employment etc. The objectives of the society are listed as the welfare of ex-servicemen as also their family, including economic and social welfare. The pre-requisite for membership of this society is that the person should be an ex-serviceman and should make an annual payment of Rs. 101/- or as per his wishes. The objectives of the society are as under :- (a) to help the ex-servicemen to get a job in the Government or non Government establishments. (b) to assist and make efforts for the families of deceased service men as also for invalid servicemen. (c) to assist and make efforts for the families of ex-servicemen in getting a technical education. (d) to prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any person, by a security agency in relation to the security of any property or person by providing personnel or otherwise and includes the provisions of services of investigation, detection or verification of any fact of activity. As is seen from above, the service for coming under service tax net is required to be provided by a security agency. The security agency stands defined in terms of Section 65(94) of the Act. For the period prior to 18-4-2006, the definition of 'security agency' as appearing in the said Section was as under : "Security agency" means any commercial concern engaged in the business of rendering services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity, whether of a personal nature or otherwise, including the services of providing security personnel. The said definition of security agency underwent a change with effect from 18-4-2006 which read as under :- "Security agency" means any person engaged in the business of rendering services relating to the security of any property, whether movable or immovable, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment of Manpower to a client. In that case, the Agency receives consideration from the client. The client will be a company or an organization where the youths are given jobs. From the facts of the present case, it is seen that the youth pay some fees to the respondent for training. This fee is definitely not a consideration given by a client to the Manpower Recruitment Agency. Revenue has not shown with evidence that the Organizations where the youth are employed paid any consideration to the respondent. Be that as it may, a Commercial concern, from the popular meaning of the word as indicated in the dictionary, means a concern engaged in any activity with profit motive. Revenue's understanding that profit motive is not necessary for a Commercial concern is not at all correct. The Audited Accounts of the respondent unit reveal that they had not made any profit out of these activities. There is also no indication that fees were being charged specifically for providing employment to the youth. From the facts of the case, we are of the view that the respondent is not a 'Commercial concern'. Therefore, they would not come within the meaning of Manpower Recruitment Agency as defined i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in such a manner that it does not result in any profit. It would indeed be difficult for person in charge of the trust or institution to so carry on the activity that the expenditure balances the income and there is no resulting profit. That would not only be difficult of practical realisation but would also reflect unsound principle of management. We, therefore, agree with Beg J. when he said in Sole Trustee, Loka Shikshana Trust's case (1975) 101 ITR 234, 256 (S.C.) that : ".... if the profits must necessarily feed a charitable purpose under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter that charitable character of the trust. This test now is, more clearly than in the past, the genuineness of the purpose tested by the obligation created to spend the money exclusively or essentially on charity." 11. At this stage, we may also refer to some of the decisions under Sales Tax Act, which stand relied upon by Shri L.P. Asthana, learned Advocate for the appellants in the case of State of Bombay v. Ahmedabad Education Society reported in AIR 1956 Bom. 673, it was found that the Ahmedabad Education Society which was formed for ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in all the business activities, but the intention of carrying on the business with the motive of earning should be there. 12. Our above views find support from the another decision of the Hon'ble Supreme Court in the case of State of Tamil Nadu v. Board of Trustees of the Port of Madras reported in AIR 1999 SC 1647. Without referring to the facts of the case, we would like to reproduce the relevant observation of the Hon'ble Supreme Court as contained in paras 40 & 48 of the said judgment :- "40. On the facts of the case before the Andhra Pradesh High Court, the canteen activity was treated as a requirement of statute and also an integral part of the main activity and was, therefore, not business. If the Andhra Pradesh meant that incident or ancillary sales or sales made in connection with a main activity, (which main activity was not in itself business), in order to escape liability should always be proved by the assessee to be an integral part of the main 'non-business' activity, we are not inclined to agree. In our view, that would erase the distinction between sales which were integral with the main 'non-business' activity and those which were incidental or ancil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the association of ex-servicemen are liable to service tax, having been provided for commercial concern. 14. On going through the said judgment, we find that the Hon'ble Bench has taken note of the precedent decision of Tribunal in the case of C.C.E., Chandigarh v. Sikar Ex-Servicemen Welfare Society Ltd. and has observed that the said judgment dealt only with the penalty and cannot be of any help to the appellant. Similarly, in the case of Ex-services Co-operative Society, the Bench observed that since the appellants in that case was a co-operative society which was held to be not commercial concern, in the present case, the appellants are a corporation and not co-operative society and the ratio of the said decision cannot be followed. Similarly, while dealing with the Tribunal decision in the case of BCCI, the Tribunal observed that since the said decision was based upon the Supreme Court judgment in the case of Secretary, Ministry of Information and Broadcasting v. Cricket Association of Bengal and Others reported in 1995 (2) SCC 161 holding that BCCI is not a commercial concern, the fact of that case cannot be applied. Similarly, the Tribunal did not follow the prece ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
