2017 (9) TMI 1072 - AT - Service Tax

Classification of services - Cargo Handling Services or Manpower Recruitment Agency service - case of Revenue is that the appellant has not provided any evidence on record except a contract dated 25.10.2005 awarded to them by JCT for internal handling and movement of raw material, finished goods, husk feeding and misc. jobs - Held that - even in terms of the said contract, services to be provided by the appellant were internal movement of the cargo in the factory of the JCT. There is no dispute on the above scope of the services provided by the appellant - the issue stands decided in the case of Gaytri Construction Co. Vs. CCE, Jaipur 2011 (9) TMI 481 - CESTAT, New Delhi , where it was held that shifting of goods within the factory premises and the manpower supplied by the service provider cannot be held to be classifiable under Cargo Handling Service. The appellants have contended the service fall under the category of Manpower Recruitment Agency, which were brought under the service tax w.e.f 16.06.2005. The appellant was also registered with the said category w.e.f. 28.06.2005 by the department itself and thereafter, no objection has been taken by the Revenue. These facts support the appellants claim that they were providing Manpower Recruitment Agency service even during the period prior to their date of registration. Extended period of limitation - Held that - No specific instances or evidence of any suppression or mis-statement with a mala-fide intention stands attributed to the appellant, except a bald statement that they did not get themselves registered and did not follow the due procedure, so as to justifiable invoke the longer period of limitation - extended period not invocable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the services provided by the appellant fall under the category of Cargo Handling Services?
2. Whether the demand raised against the appellant is justified?
3. Whether the invocation of the longer period of limitation by the Revenue is valid?

Analysis:
1. The audit officers found that the appellant received payment for handling, loading, and unloading materials in a factory premises. The original adjudicating authority confirmed a demand for services tax, penalties, and interest due to non-registration and non-filing of returns by the appellant. The appellant contended that they provided manpower services to the company, not cargo handling services, and were registered under Manpower Recruitment Agency post the relevant period. The appellate authority upheld the demand, but the Tribunal noted that the services were internal movement within the factory premises, not cargo handling. Citing precedents, it was established that such services do not classify as Cargo Handling Services. The appellant was registered under Manpower Recruitment Agency post the period in question, supporting their claim.

2. The Tribunal found that the demand was raised based on the longer period of limitation without specific evidence of suppression or intentional misstatement by the appellant. Given the confusion in the service tax law during that period and the lack of evidence of any positive action by the appellant, the invocation of the longer period was deemed unjustified. Consequently, the Tribunal set aside the demand on both merits and limitation, allowing the appeal in favor of the appellant.

3. The Tribunal's decision to set aside the demand was based on the conclusion that the services provided did not fall under Cargo Handling Services and the invocation of the longer period of limitation lacked justification. The judgment provided consequential relief to the appellant, highlighting the importance of evidence and clear justification for invoking longer periods in tax matters.