2018 (5) TMI 1135 - AT - Service Tax

Manpower Supply Service - SCN was issued to the Appellant on the ground that they have not made timely payment of service tax in terms of Point of taxation rules; that they did not raise bills on completion of services and did not pay tax on advances received - Held that - the revenue s appeal has only been admitted and there are no further order. In such case, it is appropriate to remand the case back to the adjudicating authority to consider the facts of the case afresh - appeal allowed by way of remand.

Summary

Issues:
1. Delay in service tax payment and interest payment.
2. Classification of service under Manpower Supply Service.
3. Ex-parte order and applicability of earlier Tribunal judgment.
4. Applicability of Business Auxiliary Service classification.
5. Imposition of penalties under sections 76, 77, and 78 of the Finance Act.

Analysis:

1. The case involved allegations of delayed service tax payments and non-payment of interest from July 2008 to March 2011. The show cause notice proposed a demand for service tax, interest, and penalties under sections 76, 77, and 78 of the Finance Act. The adjudicating authority confirmed the demand, interest, and imposed penalties, leading to the appeal by the Appellant.

2. The Appellant argued that their services were related to harvesting and transporting sugarcane, not falling under Manpower Supply Service. They contended that the impugned order was passed ex-parte and cited a previous Tribunal judgment in their favor. The Tribunal analyzed the definitions under the Finance Act and concluded that the services provided did not constitute manpower supply, setting aside the demands based on this classification.

3. The Tribunal noted that the impugned order was ex-parte, and the Appellant's activity did not align with Manpower Supply Service. Relying on the earlier Tribunal judgment and statutory definitions, the Tribunal determined that the demands under the manpower supply service category were not sustainable in law. As a result, the demands were set aside, and the appeal was allowed on merits, without delving into other issues raised by the Appellant.

4. Regarding the classification of the Appellant's activity, the Tribunal found it more fitting under Business Auxiliary Service (BAS) due to its nature of providing services incidental to the procurement of goods like sugarcane. The Tribunal reasoned that the demands made under the manpower supply or recruitment agency services category were not valid, given the nature of the services provided by the Appellant.

5. The Tribunal directed a remand of the case back to the adjudicating authority to reconsider the facts in light of the Tribunal's earlier order. The impugned order was set aside, and the appeal was allowed by way of remand. The Tribunal also addressed the pending revenue's appeal before the High Court, noting that it had only been admitted without further orders, leading to the decision to remand the case for fresh consideration.