TMI Blog2018 (8) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - Service Tax Appeal No. 51088 of 2014 - ST/A/52768/2018-CU[DB] - Dated:- 6-7-2018 - Shri Anil Choudhary, Member (Judicial) And Shri C.L. Mahar, Member (Technical) Shri B.L. Narsimhan and Ms. Preetika Mishra, Advocates for the appellant. Shri G.R. Singh, Authorized Representative (DR) for the Respondent. ORDER Per. Anil Choudha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty, which may be altered by agreement, to share both in profit and losses. The independence of joint venture as a separate legal entity, away from its constituent members, has further been fortified in the case of M/s. Gammon India Ltd. v. Commissioner of Customs, Mumbai, 2011 (269) E.L.T. 289 (S.C.) wherein the Hon ble Supreme Court categorically denied the benefit of exemption to the JV as the impugned goods were directly imported by constituent 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 base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the appellant clarified that correspondence with the supplier of goods and placement of order had been done by Gammon and not by the joint venture or on their behalf. He also admitted that payment for the machine had not been made from the joint venture account, which had been provided for the contract but from the funds of Gammon. 21. Thus, the inevitable conclusion is that import of Concrete batching plant 56 cum/hr by Gammon cannot be considered as 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 liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services received from abroad are meant for use in education, and not in relation to business or commerce. 14. In this regard, reference is made to Circular No. 84/6/2006-ST, dated 01/11/2006, wherein it was clarified that IITs are established to impart education without any profit motive and are not commercial concerns. The relevant excerpt from the circular is as under: 4. The issue has been examined by the Board. A commercial concern is an institution/establishment that is primarily engaged in commercial 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the alleged subscription amount is nothing compared to the amounts paid to foreign vendors for subscription out of the grants received from MHRD. 19. Thus, findings in the impugned order are baseless and confirmation of demand based on such findings has no legs to stand. The same deserves to be set aside. The appellant is not liable to pay tax under the category of manpower supply services. 20. At the outset, it is submitted that the confirmation of demand in the impugned order under MPS services is beyond the scope of show cause notice. The demand in the show cause 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id show cause notice was adjudicated vide order-in-original dated 09/02/2010, wherein demand was dropped by observing that the appellant has, in fact, paid excess tax. 29. In view of the above, it is submitted that the appellant has not made any short-payment of tax and confirmation of demand thereof in the impugned order is not sustainable. 30. In any case, it is submitted that such confirmation of demand without specifying the category of service to which it pertains and the calculation thereof, is totally against the principles of natural justice and cannot be sustained. In absence of suppression, extended 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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