2008 (1) TMI 373 - AT - Service Tax

Appellants were engaged in providing the labour to the various companies on contract basis but were not recruiting manpower for anyone - supply of manpower was included in definition of Manpower Recruitment Agency only after the amendment in May 2005 - applicant has made out strong case for waiver of pre-deposit - Commissioner (Appeals) has dismissed the appeal of the applicant on the ground of non-compliance and has not recorded any finding on merits appeal is allowed by way of remand

Summary

Issues: Application for waiver of pre-deposit of service tax. Interpretation of 'Manpower Recruitment Agency'.

Application for Waiver of Pre-deposit of Service Tax:
The judgment addresses the application for waiver of pre-deposit of service tax amounting to Rs. 52,482 along with interest and penalty. The Vice President finds it suitable to dispose of the appeal at this stage without the requirement of pre-deposit. The period of dispute is from April 2001 to December 2004. The appellant was confirmed to be providing services of a 'Manpower Recruitment Agency', although they were supplying labor on a contract basis and not recruiting manpower. The definition of 'Manpower Recruitment Agency' did not include supply of manpower before May 2005. Citing a similar case where pre-deposit was waived, the Vice President decides to waive the requirement of pre-deposit and stay the recovery. The impugned order is set aside, and the case is remitted back to the lower appellate authorities for a fresh decision on the merits of the case, allowing the appeal by way of remand.

Interpretation of 'Manpower Recruitment Agency':
The key issue revolves around the interpretation of the term 'Manpower Recruitment Agency'. The appellant was providing labor services on a contract basis, not recruiting manpower. The definition of 'Manpower Recruitment Agency' did not include the supply of manpower before May 2005. The judgment highlights that the appellant was not engaged in recruitment but in supplying labor to various companies. The Vice President, considering the historical context of the definition and a similar precedent, finds in favor of the appellant. This interpretation plays a crucial role in the decision to waive the pre-deposit requirement and remit the case back for a fresh decision on merits, emphasizing the need for a reasonable opportunity for the appellant to present their defense.

In conclusion, the judgment delves into the application for waiver of pre-deposit of service tax and the interpretation of 'Manpower Recruitment Agency'. It provides a detailed analysis of the historical context of the definition, the nature of services provided by the appellant, and relevant precedents to support the decision to waive the pre-deposit requirement and remit the case for a fresh decision on merits. The Vice President's thorough examination of the issues involved showcases a fair and reasoned approach to resolving the dispute.