2013 (5) TMI 672 - AT - Service Tax

Man Power Supply Agency services - stay - issue involved in this case is regarding Service Tax liability on the appellant on the ground that they have supplied labourers to their service receiver for the purpose of conversion of big lumps of bauxite and chalk into small pieces. - held that - there is some statement indicating that the labourers are supplied on instruction of mine supervisor and they were working as per the instructions given by the supervisor. - matter needs reconsideration - pre deposit ordered for Rs. 2 lakhs - subject to compliance matter remanded back to commissioner (appeals).

Summary

Issues: Stay petition for waiver of pre-deposit of Service Tax confirmed by the adjudicating authority for Man Power Supply Agency services, penalties imposed, appeal dismissal due to non-compliance with pre-deposit order, consideration of merits by the first appellate authority, Service Tax liability on labor supply for conversion work, instructions given by mine supervisor, deposit condition imposed on the appellant.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved a Stay Petition seeking waiver of pre-deposit of Service Tax confirmed for Man Power Supply Agency services, penalties, and interest. The first appellate authority had dismissed the appeal citing non-compliance with the pre-deposit order without discussing the merits of the case. The Tribunal noted the lack of merit discussion by the first appellate authority and decided to dispose of the Stay Petition, taking up the appeal for further consideration.

The core issue revolved around the Service Tax liability on the appellant for supplying laborers to convert bauxite and chalk into smaller pieces. The appellant argued that the payment received was as per an oral contract at a specific rate per metric ton, not for labor supply. The Tribunal acknowledged the need for a detailed consideration of this issue by the first appellate authority, especially in light of the laborers working under the mine supervisor's instructions.

To address the matter, the Tribunal directed the appellant to deposit a specified amount within a set timeframe and report compliance to the first appellate authority. The first appellate authority was instructed to assess the compliance and proceed with the appeal's merits, ensuring adherence to natural justice principles. It was clarified that upon the deposit confirmation, the appeal should be taken up for disposal without additional deposit requirements.

In conclusion, the Tribunal disposed of the appeal with the outlined conditions, emphasizing the importance of a thorough examination of the Service Tax liability issue and the necessity for compliance with the deposit directive for further proceedings.