TMI Blog2020 (6) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1994 and waive all the penalties imposed upon the appellant. Appeal allowed by way of remand. - ST/401-402/2008 - A/30898-30899/2020 - Dated:- 24-6-2020 - MR. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL) AND MS. RACHNA GUPTA, MEMBER (JUDICIAL) Shri M. Taraka Srinivas, Advocate for the Assessee. Shri P.R.V. Ramanan, Authorized Representative for the Revenue. ORDER 1. These two appeals are filed by the assessee and the revenue against the same impugned order and hence are being disposed of together. 2. Heard both sides and perused the records. 3. The facts of the case in brief are that M/s National Remote Sensing Centre (NRSC), Balanagar, Hyderabad is an autonomous body under the Department of Space Research, Government of India. The department informed NRSC that their activities related to photography services, scientific or technical consultancy service and commercial training and coaching services, etc., are taxable services and therefore, they are liable for payment of tax. Accordingly, the assessee applied for and obtained registration to the service tax department under the heads Photography service , Scientific and Technical Consultancy service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed even on such amounts, according to the revenue. 6. On the other hand, the assessee is aggrieved by the entire confirmation of the demand itself. Learned counsel for the assessee contested the demands both on merits and on limitation. He also contested the imposition of penalties upon the assessee. On the date of hearing i.e., 21.11.2019, learned counsel for the assessee was requested to provide sample copies of the project reports which they have prepared and supplied to their clients within a month. On 27.01.2020, learned counsel has submitted a note along with the copies of some documents but none of the project reports were submitted. The documents that he submitted were only copies of sanction orders issued by various Ministries to their clients copies of which have also been marked to the appellant. Therefore, we proceed to decide the issues on merits based on the records which are available and submissions made by both sides. Learned counsel for the assessee submits that they are a society registered under Societies Registration Act, 1860, created as per a resolution passed by the Union Cabinet. They initially started functioning under the administrative control of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grammetric, or hydrographic, for the purpose of preparing maps. It also includes surveying or collection of data by satellites. 8.5 Map making consists of preparation or revision of maps of all kinds such as topographic, hydrographic, roads, planimetric, cadastral, city maps etc. using various information sources. 8.6 However, survey and map-making services rendered by an agency under the control of the Government or authorised by the Government, such as 'Survey of India' are specifically excluded and are outside the scope of this service. 8. He would submit that the case of the revenue is that the services rendered by them fall under the definition of Photography service under section 65(78) Scientific and technical consultancy service under section 65(92) of the Finance Act, 1994. These read as follows: Section 65(78) Photography includes still photography, motion picture photography, laser photography, aerial photography and fluorescent photography. Section 65(92) scientific or technical consultancy means any advice, consultancy or scientific or technical assistance rendered in any manner, either directly or indirectly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ody under the Government of India and has been rendering certain services to the Government departments, Public Sector Undertakings, Private Sector Undertakings and other organisations on payment of fees and charges. The SCN has been issued under the heads photography services and scientific and technical consultancy services covering the period 16.07.2001 to 31.12.2005. Demands have also been made for the period 16.06.2005 to 31.12.2005 on the advances received against these services. The assessee is in appeal against the confirmation of demand to the extent of ₹ 19.39 Crores by the Commissioner along with interest and imposition of penalties while revenue is in appeal against the dropping of demand of ₹ 74.72 lakhs in respect of consultancy projects undertaken by the assessee for other autonomous organisations under the same department. It is not in dispute that they have been paid for these services also. 13. As far as the demand on photography services is concerned, he would submit that photography has been defined under Chapter V of the Finance Act, 1994 and it includes aerial photography in particular. The Photography division of NRSA (now NRSC) is concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of these services rendered by the appellant is definitely scientific and technical consultancy and is not merely making maps. (B) National Agricultural Technology Projects (NATP): These projects were executed by NRSC rendering technical consultancy services to the client NATP. NRSC claimed exemption under Notification 16/2002 dt.02.08.2002 which was applicable only to services rendered to international organisations and in this case no service was rendered to an international organisation. Only the project was funded by the World Bank. Therefore, learned Commissioner had correctly rejected the claim of NRSC. (C) IIRS Projects: These projects are undertaken not by the appellant but by M/s IIRS which is a division of NRSC and whose income from these services is accounted for in the books of NRSC as income. Therefore, the appellant is liable to pay service tax on this income. (D) Research Projects: Research projects were executed for Indian Council of Agricultural Research (ICAR) for standardization of methodology for large-scale soil mapping data. The assessee s contention is that these were mere research projects. However, the services which were rendered were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l would argue that the assessee never disclosed the nature of their activities to the department. But for the investigations conducted by the department, their activities would not have come to light. This certainly constitutes suppression of facts and justifies invoking extended period of limitation. The penalties imposed by the learned Commissioner are also sustainable for these reasons. He would, therefore, submit that the revenue s appeal may be upheld and the assessee s appeal may be rejected. 17. We have considered the arguments on both sides and perused the records. 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 . We proceed to examine the case on merits in the first place and then on limitation and finally examine the imposition of penalties. As far as the demand under the head of Photography services is concerned, the assessee s contention is that the nature of the services does not fall in the definition of Photography services at all. The definition of Photography Service is as follows: Taxable service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic good. In order to use the grants so received, they, in turn, need to engage other organisations or individuals and avail their services. For this purpose, they may procure goods or receive services from others. 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. Otherwise, all services and goods which are ever used by any Government department will have to be exempted. Learned counsel for the assessee also argues that the payment of service tax by the assessee would mean one organisation of Government of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner has dropped this demand is on the ground that these should be treated as in-house projects and not services rendered by the assessee to ISRO/RRSC. It is not in doubt that the assessee is an autonomous organisation registered as Society. So are the ISRO and RRSC independent autonomous organisations. If they were a part of the same organisation, there is no question of any amount being paid by one division to another. Since they are independent, autonomous organisations the services rendered by one to another becomes a service rendered to a client. The services rendered were in the nature of consultancy projects and the demand on this ground needs to be upheld on merits and we do so. To this extent, the order of the Commissioner needs to be set aside. As far as the demand under data dissemination and Photo product projects are concerned, the assessee under these projects provided geological studies, mineral exploration, city map preparation, land use and vegetation cover mapping backed by technical assistance to the customers to help them execute projects. Therefore, this falls under definition of scientific and technical consultancy service . 24. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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