2017 (9) TMI 225 - AT - Service Tax

Man Power Recruitment or Supply Agency Service - case of appellant is that the recipient of service i.e. Bhopal Sahakari Dugth Sangh Maryadit cannot be considered as client of the appellant, in order to fall under the purview taxable service - time limitation - Held that - Since the said recipient of service had engaged the services of the appellant for providing the man power for accomplishing its business purpose, such recipent should be termed as client for the purpose of the definition under Man Power Recruitment or Supply Agency Service - Further, the appellant provided such service to others namely, M/s. B.H.E.L. and the Service Tax on such services were collected and deposited by the appellant into the Government Account. Thus, the appellant cannot decide its tax liability differently in respect of the same services provided to different recipient of service. Time limitation - Held that - it cannot be said that the appellant had not suppressed the material facts from the Department in disclosing the particulars regarding the services provided to Bhopal Sahakari Dugth Sangh Maryadit - the extended period invoked for confirmation of the adjudged demand is in conformity with the statutory provisions. Appeal dismissed - decided against appellant.

Summary

Issues:
Service Tax liability on Man Power Recruitment Service, Client definition, Time limitation for show cause notice

Analysis:
The appeal challenged an order passed by the Commissioner (Appeals) related to Service Tax liability on "Man Power Recruitment or Supply Agency Service" provided by the appellant to a client. The Department alleged non-payment of Service Tax for services provided to Bhopal Sahakari Dugth Sangh Maryadit during a specific period. The Commissioner (Appeals) confirmed a reduced Service Tax demand for a certain period and imposed penalties under relevant sections of the Finance Act, 1994. The appellant contended that they were a non-governmental organization working as a charitable society, and the recipient of service should not be considered a client under the taxable service definition. Additionally, the appellant argued that the show cause proceedings were time-barred due to lack of suppression or misstatement to defraud the Government Revenue.

The Tribunal analyzed the term "client" and determined that the recipient of the appellant's services should be considered a client based on the nature of the services provided and the monetary consideration involved. It was noted that the appellant had provided similar services to other entities and paid Service Tax accordingly. The Tribunal emphasized that the appellant could not selectively decide its tax liability for the same services provided to different clients. Regarding the time limitation issue raised by the appellant, the Tribunal found that the appellant was registered with the Service Tax Department, paid taxes for services provided to other clients, and included Service Tax liability in the consideration for services provided to the disputed client. The Tribunal concluded that the appellant did not suppress material facts and that the extended period for confirming the demand was justified under statutory provisions.

In light of the above analysis, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appellant's appeal. The judgment was pronounced in open court on 07/07/2017.