TaxTMI 
TaxTMI 
2026 (4) TMI 1664
X X X X Extracts X X X X
X X X X Extracts X X X X
....e officers noticed that the appellant had not paid the service tax before the due dates and hence, interest of Rs.21,014/- in terms of Section 75 of the Finance Act, 1994 was to be paid. Secondly, it was also observed that the appellant had entered into a tripartite Memorandum of Understanding (MoU) with companies like BIGTEC and M/s. Micro Labs along with Indian Institute of Science for collaborating R&D programmes, implementing technologies using cross disciplinary expertise and to undertake these activities, the appellant rented out their buildings with the infrastructure to the participating companies and collected licence fees for the same. Alleging that this service amounted to 'Renting of Immovable Property Services' in terms of Section 65(90a) and 65(105) (zzzz) of the Finance Act, 1994, Revenue demanded service tax of Rs.19,86,335/- for the period from June 2007 to March 2008. Thirdly, the officers also alleged that the appellant provided logistic support like space, infrastructure and administrative facilities to the M/s. Dorabji Tata Trust for conducting symposiums on tropical diseases and it was alleged to be 'Event Management Services' and accordingly Rs. 16,31,669/- w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d period of limitation cannot be sustained since the appellant is a non-profit organisation working under Indian Institute of Science in the field of scientific research and they cannot be alleged with suppression or mis-statement of facts, hence, interest and penalties also to be set aside. 4. The learned Authorised Representative (AR) on behalf the Revenue submitted that Audit is a statutorily recognised mechanism for examination and verification of records and any detection for non-payment or short-payment of tax through audit does not by itself invalidate the proceedings. On examination of records and documents maintained by the appellant, it was noticed that the appellant had not discharged service tax on the services discussed and confirmed by the Commissioner in the impugned order, hence, the same needs to be sustained. With regard to the issues on merits, it is submitted that ownership of immovable property is not a condition precedent for levy of service tax and service tax is to be discharged as long as immovable property is being rented out for a consideration. Since the appellant had entered into a MoU and received a consideration for renting of the immovable propert....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al quarterly instalments paid at the beginning of each quarter, to cover the use of building space and infrastructure and para 4.2 states that SID shall act as the recipient for all monies payable by including those for the conduct of the collaborative research. 14. From the nature of the organization of M/s. IISC and M/s. SID, the nature of activities undertaken by SID on behalf of IISC, from the tripartite agreement referred to above and from the records of the case in front of me, I find that SID is a body formed under the parenthood of IISC so as to carry out certain specified activities and so as to create funds for carrying out designated activities of SID, SID themselves had been designated as recipients of the rental income arising out of the said tripartite agreement. By virtue of the said agreement, the question as to who is the service recipient gets answered as BIGTEC. Further, the question as to who is the service provider also gets answered as SID. Thus, it is clear that BIGTEC is a service receiver and the amount of money, for the services, which is to be construed as gross amount in terms of Section 67 of the Finance Act 1994, is also available as specified....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ous body or to a religious body or (ii )renting of immovable property to an educational body imparting skill or knowledge or lessons on any subject or field other than a commercial training or coaching centre. Explanation: For the purpose of this clause for use in the course of furtherance of business or commerce includes use of immovable property as factories, office buildings, warehouses, theatres, exhibition halls and multiple use buildings. 6.2 Looking into the Commissioner's observations in the impugned order and reading the MOU, we find that the MOU for research and development dated 23.11.2007 between BIGTEC Pvt. Ltd. and Indian Institute of Science (IISC) and Society for Innovation and Development (the appellant), it is seen that BIGTEC had knowledge and expertise for research and the infrastructure belongs to Indian Institute of Science and the MoU is for long term collaborative R&D program called as BIGTECIISC Research Programme, for implementing technologies to discover and develop products of commercial relevance using cross-disciplinary expertise and competencies. It is also an admitted fact that as per Clause 2.1 of this MoU for the first three ye....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ices', we find that the appellant is receiving these amounts from various clients for conducting certain research on scientific and technical aspects. From one of the Agreements placed on record, we find that the Agreement was between Indian Institute of Science and NMDC for sponsoring research projects in the areas of development needed by NMDC, accordingly, it is seen that various clients as detailed in 'Annexure D' make payments for conducting research on various subjects through the tripartite agreements between IISC, SID the appellant and various other organisations. Some of the organisations that are listed in Annexure-D is M/s. Texas Instruments Ltd., M/s. Cardila Pharmaceuticals Ltd., M/s. Honeywell India Software Operations, M/s. Tata Motors, M/s. HP Labs, M/s. India Counsel of Medical Research, etc. For conducting various research-oriented projects for the above organisations, the appellant received project fees towards the same. Since these amounts are towards such research-oriented programmes, they are rightly classifiable 'Scientific or Technical Consultancy Services' and hence, the demand on this account is upheld. The audit was conducted from September 2008 and the s....