2018 (12) TMI 1363 - AT - Service Tax

Manpower Recruitment/Supply Agency Service - Rent a Cab Service - Legal Consultancy Service - reverse charge mechanism - demand of service tax - Held that - The demand of Service Tax of around ₹ 12 lakhs on Manpower Supply is not sustainable, since the short-paid service tax was made good by the appellant through payments dated 05.06.2014 04.07.2014 and reflected the same at Part-G of ST-3 returns filed on 14.11.2014 - demand set aside. Rent a Cab Service - Held that - Rent a Cab Service was exempted during the relevant period - demand do not sustain. Legal Consultancy Service - Held that - Service tax is leviable on services provided by advocate and not on other charges claimed by advocate on court fees etc. - demand do not sustain. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appellant's liability to pay service tax on Manpower Recruitment/Supply Agency Service, Rent a Cab Service, and Legal Consultancy Service.
- Allegations of non-payment of service tax leading to a demand of ?13,01,170/- confirmed by the Original Authority.
- Appeal against the Order-In-Original dated 08.03.2017 before Commissioner (Appeals) and subsequent appeal before the Tribunal.

Analysis:
1. Service Tax Liability on Manpower Recruitment/Supply Agency Service:
The appellants were alleged to have not paid service tax on a balance taxable value of around ?1.30 crores for the financial year 2013-14. The Original Authority confirmed a demand of ?13,01,170/- with interest and equal penalty. However, the appellant had made payments towards the short-paid service tax before the show cause notice was issued and reflected the same in their returns. The Tribunal found the demand not sustainable as the appellant had rectified the shortfall in payments, leading to the appeal being allowed.

2. Service Tax Liability on Rent a Cab Service:
The appellant was accused of not paying service tax on Rent a Cab Service to the tune of ?81,055/-. The appellant argued that the service was exempted during the relevant period under Exemption Notification No.23/2012. The Tribunal accepted this contention, ruling that the service tax liability on Rent a Cab Service was not applicable, thereby setting aside the demand.

3. Service Tax Liability on Legal Consultancy Service:
The appellant was also charged with not paying service tax on Legal Consultancy Services amounting to ?11,705/-. The appellant argued that service tax is leviable only on the services provided by the advocate and not on additional charges claimed by the advocate for items like Stationary, Typing, and Court Fees. The Tribunal agreed with this argument, stating that service tax is applicable only on the services provided by the advocate, leading to the impugned order being set aside and the appeal being allowed.

In conclusion, the Tribunal found in favor of the appellant on all counts, ruling that the demands for service tax on Manpower Supply and Legal Consultancy Services were not sustainable, and the service tax liability on Rent a Cab Service was exempted. The appellant was granted consequential relief as per the law, and the impugned order was set aside.