2014 (1) TMI 1418 - AT - Service Tax

Collection of fees - Manpower Recruitment Services - nature of amount collected from students for placement scheme / employment - Held that - To attract Service Tax under the category of Manpower Recruitment or Supply Agency , the services should be rendered to a client. Prima facie, these students cannot be treated as clients to whom services of recruitment and supply are being rendered. In view of the above, there shall be waiver of pre-deposit of dues as per the impugned order and stay of recovery thereof till the disposal of the appeal - Stay granted.

Summary

Issues:
Interpretation of services under 'Manpower Recruitment or Supply Agency Service' for Service Tax liability.

Analysis:
The case involved the appellant enrolling students who completed courses under the 'Alchemist Special Placement Scheme' conducted by ICFAI and its affiliates, ensuring employment with a minimum remuneration. The Commissioner treated the collected fees as 'Manpower Recruitment Services', leading to a Service Tax demand of Rs. 66,41,053 for the period 2005-2008, along with interest and penalties.

The appellant's advocate argued that the services provided to the students did not fall under 'Manpower Recruitment or Supply Agency Services' to a client. Reference was made to a Tribunal's Stay Order in a similar case to support this argument.

After considering the submissions and records, the Tribunal agreed with the appellant's advocate that the students could not be considered as clients for whom recruitment and supply services were being rendered. Consequently, the Tribunal waived the pre-deposit of dues and stayed the recovery until the appeal's disposal.

This judgment highlights the importance of correctly interpreting the scope of services under specific categories for determining Service Tax liability. The Tribunal's decision focused on the definition of 'Manpower Recruitment or Supply Agency Service' and the requirement for services to be rendered to a client to attract Service Tax under this category. The case underscores the significance of precise classification and understanding of services to avoid unnecessary tax liabilities.