2018 (8) TMI 322 - AT - Service Tax

Manpower recruitment and supply agency services - campus placement fees from the willing students enrolled by ICFAI - taxability - Held that - The activity carried out by the appellant is a service of placement to the student, which indicates that appellant is helping the students of ICFAI to get a job - placement is an activity of finding the job for a person who is on the lookout of employment and is service rendered to prospective employee which will not, get covered under the definition of manpower recruitment and supply agency services . The Tribunal in the case of Motilal Nehru National Institute of Technology 2015 (8) TMI 1138 - CESTAT ALLAHABAD was considering identical issue has held that The placement facilitation provided by educational institutions whereunder the placement charges are collected from students and not from an employer or a prospective employer, do not on a fair and reasonable interpretation of the taxable service as defined in the Act, fall outside the purview of either the definitional or enumerative provision of the Act. Demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Taxability of service provided by arranging placements for students under a special scheme.

Analysis:
1. The appellant arranged placements for students who completed courses under a special scheme governed by specific regulations. The service involved students enrolling in a course with an option to register for placement assistance. The placement fee was collected in advance, but the actual placement occurred after course completion.

2. The Revenue issued a show cause notice for service tax liability under 'manpower recruitment services.' The appellant contested, arguing they only arranged placements, not recruitment. They highlighted that the revenue authorities were aware of the process. The adjudicating authority confirmed demands and imposed penalties.

3. The appellant's counsel differentiated between placement and recruitment services, citing a CBEC circular and previous Tribunal decisions. They argued that the service provided was placement, not recruitment, which was not taxable under the statute.

4. The Revenue contended that the students were also clients, and the service fell under 'supply of manpower.' They referenced a Tribunal decision supporting taxation of placement services as services rendered to clients.

5. The Tribunal observed that the appellant's service was placement, helping students find jobs, not recruitment or supply of manpower. Referring to previous judgments, the Tribunal held that the placement fees collected from students were not taxable under 'manpower recruitment and supply agency services.'

6. Relying on the decisions in similar cases, the Tribunal set aside the impugned order and allowed the appeal on merits. The Tribunal did not address other arguments as the appeal was disposed of on the main issue.

7. The judgment concluded by setting aside the impugned order and allowing the appeal, based on the Tribunal's previous rulings on the taxability of placement fees collected from students.