2010 (12) TMI 111 - AT - Service Tax

Impugned order - Pre-deposit - The learned consultant submitted that in this case the service provided by the appellant was only for recruitment of the labour and wages were paid by the service recipient only - The department s contention is that appellant has received or can be said to have received the amount including the labourer wages, in view of the fact that TDS has been detected from the amount payable to the appellant - There are contradictory facts emerging from the bill raised by the appellant, the ledger of the appellant and the ledger of the recipient - In view of the fact that Commissioner has not passed the order on merit, the appeal itself is taken up for disposal with the consent of both the sides and matter remanded to the Commissioner (Appeals) with a direction to decide the issues on merit after giving opportunity to the appellants to present their case

Summary

Issues:
1. Dismissal of appeal due to failure to make pre-deposit of service tax amount.
2. Classification of service provided by the appellant as man power supply.
3. Ambiguity regarding the payment of wages to expert personnel.

Analysis:
1. The appeal was dismissed by the Commissioner (Appeals) as the appellants failed to make the pre-deposit of 25% of the confirmed service tax amount. However, the Tribunal noted that the Commissioner had discussed the merits of the case despite the rejection based on the non-deposit. The department argued that the appellant had received the amount, including laborer wages, as TDS was deducted. Yet, examining the bill and ledgers revealed contradictory information, leading to an arguable case. Consequently, the Tribunal allowed the stay petition, directing the Commissioner to consider the issue on merit without insisting on the pre-deposit.

2. The main contention revolved around whether the service provided by the appellant constituted man power supply. The appellant argued that they only provided recruitment services, with wages paid by the service recipient directly. The Tribunal observed discrepancies in the bill, appellant's ledger, and the recipient's ledger regarding remuneration to expert personnel. This lack of clarity necessitated a detailed examination of the service rendered and the payment structure. Consequently, the Tribunal remanded the matter to the Commissioner (Appeals) for a merit-based decision after allowing the appellants to present their case.

3. An additional issue arose concerning the ambiguity surrounding the payment of wages to expert personnel. The Tribunal highlighted the contradictory information present in the documents, emphasizing the need for a thorough assessment to determine the actual nature of the service provided and the corresponding remuneration structure. This ambiguity further supported the decision to have the Commissioner review the case on its merits, ensuring a comprehensive understanding of the facts before reaching a final conclusion.