TaxTMI 
TaxTMI 
2006 (4) TMI 29
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt Programme in which various business organisations participate and select the candidates for employment in their organisations. The institute collects fee from the companies for participation and for recruitment of the candidates separately. It appeared that the activity undertaken by the IIMB is covered under "Manpower Recruitment Agency" attracting Service Tax under the provisions of Finance Act 1994. Therefore, a show cause notice dated 8-4-2005 was issued to the appellants demanding Service Tax of Rs. 15,89,065/- for the period from October 1999 to December 2004 along with the interest and also proposing to levy penalty under Section 76 of the Finance Act, 1994. 3. In reply to the Show Cause Notice, the appellants contended that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er, no penalty was imposed on the ground that IIMB had reasonable cause for failing to pay service tax. The adjudicating authority also held that since the appellants are registered as Management Consultants under the Service Tax provisions they should have been registered under the category of Manpower Recruitment Agency also. 4. The appellants in their appeal mainly contended that they are not a commercial concern; that the activity of facilitating recruitment on their campus through campus interview are only incidental and ancillary services for attainment of main object and they are totally non commercial. In support of their contentions they relied upon the case of Commissioner of Sales Tax v Sai Publication Fund, 2002 (126) STC 288....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ervice directly or indirectly in any manner for recruitment of manpower to a client." 7. From the definitions it is clear that the Agency rendering the service must be a Commercial Concern and must be engaged in providing any service connected with manpower recruitment to a client. 8. Though the word "Commercial Concern" is used in case of several services such as Advertising Service, Manpower Recruitment Service, Market Research Service the words commercial concern is not defined in the Finance Act, 1994. The Adjudicating Authority extracted the definitions of "Commercial Concern" from the Collection of Statistics Act, 1953 (32 of 1953) to arrive at the conclusion that "concern" includes a person, but I would like to broaden the defi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l" extracted from various law lexicons which are as follows • "Bakshi's - The Law Lexicon - 2005 Edition-defines the term "commercial" as relating to trade and commerce in general and as a concern having profit as its primary aim. • SC on Words and Phrases - 2004 Edition by J.R.P. Sethi - defines "Commercial" as of, engaged in, or concerned with, commerce and having profit as its primary aim rather than artistic etc., • Black's Law Dictionary - Sixth Edition - "Commercial" relates to or is connected with trade or traffic or commerce in general, is occupied with business and commerce and is a generic term for most all aspects of buying and selling. And the term "Commercial Activity" is defined to include any type of business o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch is incidental or ancillary to their main objective cannot be called as a commercial concern, as they are not engaged in trade or commerce. Further the essence of trade or commerce viz., the profit motive. No commercial concern does the business for the sake of business without a profit motive. The case law cited by the appellants in the case of Deputy Commissioner v. South India Textile Research Association and State c Tami! Nadu v. Cement Research Institute are very much relevant and the ratios of decisions rendered are squarely applicable to the appellants case. 12. In view of the above, I hold that the appellants are not a commercial concern for the purpose of charging Service Tax under the category manpower recruitment agency. ....