2014 (2) TMI 907 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Manpower Recruitment or Supply Agency Service - Held that - no prima facie case for the appellant. It was on detailed examination and appreciation of the provisions of the relevant agreements that the Commissioner arrived at the conclusion that Manpower Recruitment or Supply Agency Service was rendered under these agreements by the appellant to the clients - Cleaning or upkeep of premises of the clients was in relation to one of the functions of some of the employees. By and large, these agreements disclosed the real nature of the transaction which appears to be supply of manpower by the appellant to the clients. This service is squarely covered by Section 65(68) of the Finance Act 1994. Prima facie, therefore, the appellant cannot claim a good case against the demand of service tax under the aforesaid head - Conditional stay granted.

Issues:
1. Waiver of pre-deposit and stay of recovery sought by the appellant for service tax dues.
2. Categorization of agreements by the original authority and subsequent demand of service tax by the revisionary authority.
3. Claim by the appellant that the service rendered was Cleaning Service and not Manpower Recruitment or Supply Agency Service.
4. Plea of limitation raised by the appellant against the demand.
5. Arguments presented by both parties regarding the nature of agreements and the services provided.

Analysis:

1. The appellant sought waiver of pre-deposit and stay of recovery for service tax dues amounting to Rs. 28,22,916/- demanded by the revisionary authority. The demand was related to the service of Manpower Recruitment or Supply Agency Service provided by the appellant to clients under specific agreements.

2. The original authority categorized the agreements into two categories, confirming demand against the appellant in one category and dropping it in the other. The Commissioner revised the part where the demand was dropped, imposing the impugned order demanding service tax and penalties.

3. The appellant argued that the service provided was actually Cleaning Service for the upkeep of clients' premises, which was not considered by the revisionary authority. The appellant also raised a plea of limitation, claiming that the extended period of limitation should not apply in a case where the original authority and revisionary authority held opposing views.

4. The Additional Commissioner (AR) opposed the appellant's claims, stating that the agreements clearly outlined the provision of manpower services by the appellant to clients. The AR contested the limitation plea raised by the appellant, emphasizing the terms of the agreements and the nature of services provided.

5. The Tribunal examined the agreements and found that the service provided by the appellant fell under Manpower Recruitment or Supply Agency Service as per Section 65(68) of the Finance Act 1994. The Tribunal noted that the agreements specified the provision of skilled and unskilled workers by the appellant to clients, supporting the Commissioner's conclusion. Additionally, the Tribunal found the limitation plea weak as the appellant failed to contest the allegations in the show-cause notices adequately.

In conclusion, the Tribunal directed the appellant to pre-deposit a specified amount within a given timeframe, with waiver and stay granted for penalties upon compliance. The judgment highlighted the importance of detailed examination of agreements and timely contestation of allegations in tax-related matters.

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