TMI Blog2014 (4) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... it no loss basis and therefore, cannot be considered as a commercial concern, this argument is without any merit. - the appellant cannot claim that they were not operating as a commercial concern. - there is no evidence available on record to show that the income received by the appellant was completely disbursed by way of payment of salaries. - it is difficult to conclude that the appellant was operating on no profit and no loss basis. Bonafide belief is not blind belief but has to be based on reasonable measures taken to entertain such belief. There is nothing in the records to show that the appellant consulted either the department or obtained any legal opinion as their liability towards service tax. Inasmuch as the appellant did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration for the services rendered of a fixed sum every month. The consideration so received amounted to Rs. 10,23,69,997/- for the period 31/10/1999 to July 2004 and the service tax payable thereon amounted to Rs. 59,40,500/-. Accordingly, a show-cause notice dated 20/01/2005 was issued to the appellant proposing to demand the above service tax amount along with interest thereon and also proposing to impose penalties under the provisions of Finance Act, 1994. The appellant contested the levy; however, the claim of the appellant was rejected and the service tax demand was confirmed along with interest thereon and penalties were imposed under the provisions of Section 75A, 76, 77 78 of the Finance Act 1994. Aggrieved of the same, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borrowing in addition to security services. Reliance is also placed on the Circular dated 26/08/2002 and 07/02/2003 which indicates the share of the each other group companies for the services rendered by the appellant to them. In their reply to the show-cause notice also, the appellant had clearly stated that in addition to the security services, the appellant had also provided services, such as common maintenance, housekeeping, common group auditing, etc. It is his contention that the appellant had charged the group companies only the actual costs incurred for rendering the services and the same was done without any profit motive and no charges were received towards the services rendered and therefore the impugned demands are not sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Essel group of companies and except for 47 security personnel, one peon and five drivers, there was no other staff working in the appellant company. He also placed reliance of statement of Shri P.B. Pillai. Security Officer, who in his statement dated 22/01/2004 had stated that he was working as Security Officer with the appellant firm since 1996 and under him 49 security staff were working. Out of the 49 staff, about 20 persons were deployed at the premises of Zee Telefilm Ltd. and as personal security staff for the Chairman of the company. Ld. AR submits that from these statements, it is evident that the services rendered by the appellant to the group entities were only security service and nothing else. Reliance is placed on the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f expenses by each of the group companies to the appellant on a monthly basis. From these circulars, it cannot be concluded that the services rendered by the appellants were not other than security services. It is in this context, the statements of the employees of the appellant firm become relevant. Shri Mohinder Garg, Director of the appellant firm in his statement dated 04/02/2004 has clearly admitted that the appellant was engaged in providing security services to M/s. Essel group of companies and other than about 47 security persons, one peon and five drivers, there were no other staff working in the appellant firm. Similarly, Shri P.B. Pillai, who was the Security Officer, in his statement dated 22/01/2004, has clearly admitted that h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had indeed rendered a multiplicity of services, the charges would have varied every month which also is a pointer towards the fact that the appellant rendered only one type of service. From the statements of the employees of the appellant firm, the service rendered was only security services and nothing else. From these documents available on record, it emerges that the appellant has rendered only security services to the group entities and not any other services as claimed by them. 5.2 As regards the claim of the appellant that they were operating on no profit no loss basis and therefore, cannot be considered as a commercial concern, this argument is without any merit. The appellants were charging consideration from the group compani ..... X X X X Extracts X X X X X X X X Extracts X X X X
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