2015 (2) TMI 391 - AT - Service Tax

Waiver of pre deposit - consulting engineers service or manpower supply service - Service tax not paid - Held that - claim of the appellant that the service rendered was covered by manpower supply service has some validity. However this aspect has not been examined in detail by going through the concerned orders, schedules to the orders and the relevant invoices. Further the claim that subsequent to 16/06/2005, they have paid the tax under consulting engineers service was not made before the original adjudicating authority. Moreover, a small amount relates to IT support service which is also required to be considered since the IT service came into statute only in 2008 for the purpose of levy. Since the issues have not been examined in detail, the matter has to be remanded at this stage itself. - Matter remanded back - Decided in favour of assessee.

Summary

Issues: Service tax demand for consulting engineers service and temporary manpower supply service, imposition of penalty, time-barred demand, classification of services, validity of appellant's claim, examination of detailed orders and schedules, remand to original adjudicating authority.

Analysis:
1. The Tribunal considered a service tax demand exceeding Rs. 31 lakhs with interest for the period 2004-05 to 2006-07 on the basis of the appellant providing consulting engineers service to customers without paying the tax. Additionally, a penalty was imposed.

2. The appellant's counsel argued that the services rendered included both consulting engineers service and temporary manpower supply service. They contended that while they paid service tax on consulting engineers service, they did not do so on the temporary manpower supply service. The appellant claimed that the demand was time-barred as the audit was completed in 2007, and the show-cause notice was issued in 2009.

3. Upon reviewing the master general agreement between the appellant and a company, it was noted that two types of schedules were outlined for payments. The appellant had paid service tax under consulting engineers service but claimed exemption for activities under Schedule A of the agreement. The appellant also argued that they had paid tax for activities post-16/06/2005 under consulting engineers service but had misclassified some services. The appellant asserted that for manpower service, they only supplied personnel as per requirements, with the customers overseeing the work.

4. The Tribunal acknowledged the validity of the appellant's claim regarding manpower supply service but highlighted that a detailed examination of the orders, schedules, and invoices was necessary. It was noted that certain issues, such as the payment for IT support service introduced in 2008, had not been thoroughly addressed. Consequently, the matter was remanded to the original adjudicating authority for further examination.

5. The impugned order was set aside, and the original adjudicating authority was directed to verify the appellant's claims. The appellant was instructed to provide all relevant details within two months for further adjudication. The stay petition and appeal were disposed of accordingly.