2012 (4) TMI 294 - AT - Service Tax

Assessee undertook the job of feeding of husk into the boiler in the factory of client and received consideration for the service provided revenue treated such consideration received under the heading Manpower Supply Service as defined under Section 65(68) and 65(105)(k) - Commissioner (Appeals) has set aside the demand on appeal but the penalties imposed under Sections 76 and 77 under the order of the Commissioner exercising power under Section 84 of Finance Act, 1994 are subsisting Held that - the issue involved was whether the appellants were undertaking the job of feeding husk into boiler or whether he was supplying man power but the fact that the Commissioner (Appeals) has come to a different conclusion itself demonstrates that there was confusion in understanding the scope of the levy - a penalty on the appellants will not be justified if at all the Revenue comes in appeal against the order in appeal passed by the Commissioner (Appeals) appeal of assessee allowed.

Summary

Issues:
1. Liability to pay service tax for feeding husk into a boiler under "Manpower Supply Service."
2. Imposition of penalties under Sections 76 and 78 of the Finance Act, 1994.

Analysis:
1. The Appellant provided services by feeding husk into a boiler at a factory and received consideration. The Revenue contended that service tax should have been paid under "Manpower Supply Service." A Show Cause notice was issued demanding service tax for specific periods. After adjudication, service tax amounts were confirmed, along with penalties under Sections 76 and 78 of the Act. The Appellants appealed before the Commissioner (Appeals) challenging the order.

2. While the appeal was pending, the Commissioner issued a Show Cause Notice using revisionary power under Section 84 of the Finance Act, 1994, objecting to the combined penalty imposed under Sections 76 and 78. Subsequently, penalties were imposed under Sections 76 and 78 for different periods. The Appellants appealed against this order, arguing that the Commissioner (Appeals) had set aside the demand and penalties in a previous order, rendering the current penalties unjustifiable.

3. The Counsel for the appellant highlighted that the Commissioner (Appeals) had nullified the demand and penalties in a previous order, leaving no current duty demand against the appellants. However, penalties imposed under Sections 76 and 77 by the Commissioner under Section 84 of the Finance Act, 1994, were still in effect, leading to the challenge against the impugned order.

4. The Revenue's representative argued that the Commissioner (Appeals) issued an order after the impugned order, and the finality of the former order was uncertain. This uncertainty raised concerns about passing a final order based on the Commissioner (Appeals)'s decision.

5. Upon considering the arguments, the issue revolved around whether the appellants were providing a service or supplying manpower. The differing conclusions reached by the Commissioner (Appeals) indicated confusion regarding the levy's scope. Given the circumstances, the Judge concluded that setting aside the impugned order was appropriate, especially if the Revenue appealed against the Commissioner (Appeals)'s decision. Consequently, the appeal was allowed, and the impugned order was overturned.