2019 (6) TMI 13 - AT - Service Tax

Refund claim - duty paid under protest - wrong classification of services - appellant rendered typing services to the University of Mysore, which they claimed that they wrongly classified the said service under the category of manpower recruitment and supply - period from January 2006 to January 2007 - rejection of refund claim on the ground that the appellant is a service provider and the said service of providing casual labour attract service tax. HELD THAT - As per the Agreement between the appellant and the University of Mysore, the appellant is to execute the typing work and housekeeping work of the University. Perusal of the various clauses of the Agreement shows that the appellants are involved in actual execution of work and not merely supplying of manpower - further the definition of manpower supply as contained in Section 65(105)(k) is not applicable to the appellant as the appellant has not supplied the manpower but is only executing the work on typing and housekeeping for which he is paid and if his work is found to be unsatisfactory, the contract could be terminated as per the terms of the Agreement. Appeal allowed - decided in favor of appellant.

Issues:
1. Appeal against rejection of refund claim for service tax under the category of 'manpower recruitment and supply'.
2. Interpretation of the Agreement between the appellant and the University of Mysore.
3. Determination of whether the appellant is solely executing work or supplying manpower.
4. Applicability of the definition of manpower supply under Section 65(105)(k) of the Finance Act, 1994.
5. Comparison of decisions cited by both parties in support of their arguments.

Analysis:

1. The appeal was filed against the rejection of a refund claim for service tax paid under the category of 'manpower recruitment and supply.' The appellant, engaged in providing security and detective services, had mistakenly paid service tax for typing services provided to the University of Mysore. The Department issued a show-cause notice proposing to reject the refund claim, leading to subsequent rejections by the original authority and the Commissioner(Appeals).

2. The Agreement between the appellant and the University of Mysore was crucial in determining the nature of services provided. The Agreement outlined that the appellant was responsible for executing typing and housekeeping work for the University, including the use of materials for cleaning. The terms of the Agreement indicated that the appellant was engaged in actual work execution, not just supplying manpower.

3. The key issue revolved around whether the appellant was supplying manpower or solely executing work. The appellant argued that they were not supplying manpower but were directly involved in typing and housekeeping tasks as per the Agreement. The Tribunal found that the appellant's activities aligned more with work execution rather than mere manpower supply.

4. Section 65(105)(k) of the Finance Act, 1994, defines manpower supply, which was a point of contention in this case. The Tribunal concluded that this definition was not applicable to the appellant as they were not merely supplying manpower but actively performing typing and housekeeping duties as per the Agreement.

5. Both parties cited previous decisions to support their arguments. The appellant referenced cases where similar situations were ruled in favor of the service provider, emphasizing the actual execution of work. In contrast, the Revenue relied on decisions that favored treating the appellant as engaged in manpower supply. The Tribunal found the appellant's cited decisions more relevant based on the specific terms of the Agreement and ruled in favor of the appellant, allowing the appeal and setting aside the impugned order.

In conclusion, the Tribunal's detailed analysis of the Agreement, nature of services provided, legal definitions, and comparison of cited decisions led to the setting aside of the impugned order and the allowance of the appellant's appeal for a refund claim related to service tax.

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