2021 (9) TMI 181 - AT - Service Tax

Levy of service tax - Manpower Supply Service - Job works/contract works - appellant has discharged the service tax on the impugned services or not - grant of cum-tax benefit - Penalty imposed after the period 2012 - HELD THAT - For the period prior to 2012, the issue stands covered in favour of the appellant wherein the Tribunal in G. RAMAKRISHNAN, K. BALAKRISHNAN, P. KANNUSAMY, M. ARULPRAKASAM, R. ATHINARAYANAN, S. SUBBURAYALU VERSUS CCE ST MADURAI 2019 (3) TMI 42 - CESTAT CHENNAI has held that as per definition of Manpower Supply Services, the demand cannot sustain for the job works / contract works done by the appellant for TAFE. It is argued by appellant that they have discharged the service tax liability and the matter may be remanded to verify the same and also to look into the issue of cum-tax benefit. On perusal of the impugned order, it is seen that though the appellant has raised this contention, the same has not been considered by the authorities below. The matter with regard to the period after 2012 is remanded to the adjudicating authority who shall determine afresh the duty demand for the period after 1.7.2012 and examine whether service tax on these services has been discharged. Penalty imposed after the period 2012 - HELD THAT - Being an interpretational issue the appellant cannot be saddled with the guilt of intention to evade tax. Further, there is no allegation or finding of any positive act on the part of the appellant of willful suppression to evade service tax. On such score, imposition of penalty is unwarranted and requires to be set aside. The appeal is partly allowed and partly remanded.

Summary

Issues Involved:
Appeal against demand for service tax under 'Manpower Supply Service' category provided to a specific company, invoking extended period, and contesting liability and penalty imposition post-2012.

Analysis:
The appeals were heard together concerning the demand for service tax under 'Manpower Supply Service' provided to a company. The Show Cause Notices invoked the extended period, covering different time frames. The appellant contested the liability for the period post-2012, stating they had paid the tax, which was not adequately considered by the lower authorities. The appellant requested a remand to verify tax discharge and cum-tax benefit post-2012.

The issue for the period pre-2012 was in favor of the appellant, as per a previous Tribunal decision. The agreement between the parties indicated the appellant as an independent contractor responsible for executing specific works, not as a supplier of manpower. The Tribunal found no legal basis for the demand, setting aside the orders and allowing the appeals with consequential benefits.

Regarding the period post-2012, the appellant's liability was not contested, and they claimed to have discharged the service tax. The Tribunal remanded the matter to the adjudicating authority to reassess the duty demand, verify tax discharge, and consider the cum-tax benefit. The imposition of penalties post-2012 was deemed unwarranted due to lack of evidence of willful suppression or intent to evade tax, thus setting them aside.

In conclusion, the demand, interest, and penalties pre-2012 were set aside, and the matter post-2012 was remanded for reassessment. Penalties post-2012 were also set aside. The impugned orders were modified accordingly, partially allowing the appeals and partly remanding them for further review.