March 2012
(2012) 25 STR 39 (Tri.-Del.) — Bhootpurva Sainik Society v. Commissioner of Central Excise, & Sales Tax, Allahabad.
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Appellant an association of ex-servicemen — Registered under Societies Registration Act, 1860 — Engaged in welfare of ex-servicemen — E.g., assisting them in finding employment, etc. — Entered into an agreement with Bharat Sanchar Nigam Ltd. — Whereby monthly amount was paid by them for services of security guards — Revenue demanded service tax on the security agency services provided by appellant prior to 18-4-2006 — Old definition in force with term ‘commercial concern’ — Reference of various judgments considered — Held, Appellant not a commercial concern — Service tax not payable.
Facts:
The appellants were registered under the Societies Registration Act, 1860 acting for the welfare of ex-servicemen who were members of the society. They were engaged in various causes like helping ex-servicemen to get a job, assist them and make efforts to help families of deceased ex-servicemen, etc. For the said purpose, the society entered into an agreement with Bharat Sanchar Nigam Ltd. for the services of security guards. The Revenue issued a show-cause notice on 21-9-2004 demanding service tax of Rs.26,494 for the period April, 1999 to December, 2003. The appellants pleaded that the old definition of security agency services was applicable to them and not being a commercial concern they were not covered. However, as the term ‘commercial concern’ was not defined in the Finance Act, 1994 the Revenue applied the popular meaning of commercial concern. Decisions in Sikar Ex-Servicemen Welfare Co-op. Ltd., (2006) 4 STR 303 (Tri.) and BCCI v. CST, Mumbai (2007) 7 STR 384 (Tri.) were relied upon by the appellants and hence, it was contended that they cannot be referred to as a commercial concern.
Held:
It was held that the appellant did not carry any of its activities with an intention of earning profits, nor were they considered as commercial concern and hence, were not liable to pay service tax.
