2009 (6) TMI 101 - AT - Service Tax

The nature of service was to provide the conductors to State Road Transport Corporation - the appellant was employer of the conductors in terms of the agreement revenue contend that appellant shall be covered under the category of Man Power Recruitment of supply agency under Section 65(68) of the Finance Act, 1994.- prima facie, we find that revenue s interest shall be prejudiced if pre-deposit of Rs. 15 lakhs is not directed to be made stay granted partly

Summary

Issues:
1. Tax liability on services provided to UPSRTC.
2. Applicability of service tax.
3. Time-barred demand.

Analysis:
1. The appellant contested the tax levied on services provided to UPSRTC, arguing that the payments made by UPSRTC should not be taxable in their hands. The appellant claimed that they should not be liable to pay service tax on the nature of service provided, which involved supplying conductors to UPSRTC as per agreements.

2. The Departmental Representative (DR) contended that the appellant's case fell within the scope of the Tribunal's decision in the Punjab Ex-servicemen Corpn. v. CCE, Chandigarh case. It was argued that the appellant's services could be categorized as Man Power Recruitment or supply agency services under Section 65(68) of the Finance Act, 1994. Therefore, the DR insisted that the entire pre-deposit amount should be made as demanded by the authorities.

3. After hearing both parties and examining the agreement in question, the Tribunal referred to its previous ruling in the Punjab Ex-Servicemen Corpn. case. While acknowledging that the appellant was the employer of the conductors as per the agreement, the Tribunal found that the revenue's interests could be compromised if a pre-deposit of Rs. 15 lakhs was not made within the specified timeline. Consequently, the Tribunal directed the appellant to comply with the pre-deposit requirement, and the realization of the remaining demand was stayed pending the appeal's disposal.