2009 (3) TMI 99 - AT - Service Tax

Activity of deputing some officials and staff to another group company which were engaged in day-to-day activities - management consultant is one who is engaged in providing service relating to conceptualizing, devising, development, modification, rectification or upgradation of any working system of any organization held that impugned activities can be considered only as that of supplier of manpower which was taxable only from 16-6-2005 held that activities of the appellants do not fall under the category of management consultant

Summary

Issues:
Appeal involving a common issue of whether the appellant's activities qualify as "management consultant" services for Service Tax liability.

Analysis:
The appellant, a manufacturer of chemicals, deputed personnel to another group company for day-to-day activities like purchase and sale. The original authority and Commissioner (Appeals) held the activities as falling under "management consultant" category, confirming Service Tax demand and penalties. The appellant argued that the deputed personnel were not rendering advisory services akin to a consultant but were involved in actual management functions, citing relevant tribunal decisions. The definition of "management consultant" was debated, with the appellant contending that their activities were akin to manpower supply, taxable only from a later date. The Tribunal noted the inclusive definition of "management consultant" involving services related to organizational management. However, considering the nature of appellant's activities and previous tribunal decisions, the Tribunal agreed with the appellant's argument. The Tribunal held that the appellant's activities did not qualify as "management consultant" services during the relevant period, allowing the appeals with consequential relief.