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TMI Blog2020 (6) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... ained registration to the service tax department under the heads "Photography service", "Scientific and Technical Consultancy service" and "Commercial Training & Coaching service". Records and data were obtained from the appellant by the department and statements of Shri Janardhan Rao, Head of Accounts & Financial department of NRSC, were recorded. After investigating the nature of their activities a show cause notice was issued to the appellant covering period 16.06.2005 to 31.02.2005 invoking extended period of limitation on 23.10.2006. In this SCN, NRSC was called upon to explain why an amount of Rs. 19,89,66,570/- should not be demanded from them as service tax on photography services and scientific and technical consultancy services rendered by them. Education Cess amounting to Rs. 24,24,689/- was also demanded from them. Interest was also proposed to be demanded on the aforesaid amounts and some amounts of tax and interest already paid by them were proposed to be appropriated against the aforesaid demands. It was also proposed to impose penalties under section 76, 77 & 78 of the Finance Act, 1994 upon the appellant. 4. After following due process, the learned adjudicating au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution passed by the Union Cabinet. They initially started functioning under the administrative control of department of science and technology and were subsequently brought under the control of department of space. He submits that they are an autonomous body under the department of space. Subsequently, w.e.f. 01.09.2008, NRSA has been converted into National Research Space Center, a center under the department of Space/ISRO. They conduct aerial surveys and digital mapping surveys. The services which were rendered by them were classified by the revenue as (i) Photography services and (ii) Scientific & Technical Consultancy services. It is his assertion that the services which they have rendered are in the nature of "survey and map making services" covered by section 65(104)(b) and section 65(105)(zzzc) of the Finance Act, 1994 and not under Photography services and Scientific & Technical Consultancy services. He would submit that while the nature of their service is survey and map making, if such services are provided by an agency under the control or authorized by the Government in relation to survey and map making, they get excluded from the taxability by virtue of section 65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l assistance rendered in any manner, either directly or indirectly, by a scientist or a technocrat or any science or technology institution or organization, to any person, in one or more disciplines of science or technology." 9. With respect to the demand under the head photography service, he would submit that they are undertaking different projects for clients. It is the case of the department that they undertake projects in which aerial survey or mapping is done and aerial photography is within the scope of the terms 'photography'. Accordingly, the demand on this ground has been confirmed. With respect to demand under scientific and technical consultancy services, he submits that these pertain to activities which involve photography, conducting surveys and preparation of reports. Learned counsel for the assessee would submit that the nature of their work would squarely fall under the definition of 'survey and map making services' and therefore, the same cannot be called as 'scientific and technical consultancy service'. Therefore, he would submit that the demand on both accounts must be dropped. 10. He would further submit that National Remote Sensing Agency (NRSA) has now bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ography division of NRSA (now NRSC) is concerned with processing of aerial films, general photography and data acquisition; aerial division is concerned with aerial photography by low level flying aircrafts specially designed for the purpose. They have rendered these services to other organisations including Government organisations and they charged amounts for these services. They received payments/fees for the projects undertaken by them and none of these were rendered as a social obligation or for some general good or for charitable purposes. These services have been rendered in their capacity as a commercial concern or agency. The term "commercial concern" in the photography services has been replaced by the term "person" w.e.f. 07.06.2005. Even after such amendment, these services do fall under the head of photography services. Therefore, the demand of photography services is correctly confirmed. 14. As far as the demand on scientific and technical consultancy services is concerned, it is on the amounts received under the following projects: (A) Projects completed under Grants in Aid received from other Government departments: In these cases, it is the case of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices which were rendered were not merely sharing of data/information but involved evolving standardized methodology and delivering detailed study of the existing methods, availability of data, organisation of systematic requirements arriving at an optimal solution and making recommendations. Thus, it was in the nature of technical consultancy for ICAR, who paid for the services rendered by the appellant. (E) System Projects for Defence: These services relate to services rendered in respect of earth station at Delhi for which the appellant received payments from the Ministry of Defence and accounted for it under the head 'consultancy' projects. These are also in the nature of scientific and technical consultancy services. (F) Consultancy projects to ISRO/RRSC: The assessee's contention is that these were "in-house projects" which contention has been accepted by the learned Commissioner in the impugned order. It is the contention of the learned special counsel that the appellant is a different legal entity and ISRO and RRSC are different legal entities and it is for this reason, they have been paid amounts for rendering services. Therefore, they cannot be considered as part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Taxable service" means any service provided or to be provided by a commercial concern to any person, by a photography studio or agency in relation to photography, in any manner." Photography is defined under section 65(78) as follows: "Section 65(78) - 'Photography' includes still photography, motion picture photography, laser photography, aerial photography and fluorescent photography." 18. Thereafter, 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. We find that 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. In our view, all these services squarely fall under the definition of 'Photography service' as per Chapter V of the Finance Act, 1994. However, the second question is whether NRSC is a commercial concern or just another legal person. We find 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment of India paying it to another. Even if it is so, if this tax has to be paid it must be. In fact, even if the Service Tax Department itself hires taxis and service tax is payable on such service, they have to pay the same out of their budget along with the billed amount to the service provider who pays the Service Tax to the Government although the amount comes back to the Government as revenue in the form of service tax. We, therefore, find no force in the argument of the appellant that no service tax must be charged on the grants-in-aid. 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. 20. As far as the NATP projects are concerned, the assessee's argument was that these were conducted with funds received from the World Bank and hence must be treated as exempt under notification No.16/2002 dt.02.08.2002. We find that the exemption notification does not extend to every project which is funded by the World Bank but extends only to service which are rendered to international organisations. Therefore, if any service is rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above, we find that the demands, as raised in the SCN, need to be upheld on merits. However, we find 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. Revenue's argument is that the assessee had not come forward to disclose all their activities and therefore, they have suppressed the fact which is sufficient to invoke extended period of l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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