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2023 (9) TMI 1065 - AT - Service TaxLevy of Service Tax - Manpower Supply Services - appellant is a Society registered under Andhra Pradesh Co-operatives Societies Act 1964 - appellant has not attended the (personal hearing) PH though several opportunities were given - HELD THAT - The Adjudicating Authority has given very detailed findings and has held that the Appellant s arguments cannot be legally sustained, by holding that the service provider is a society registered under the Andhra Pradesh Co-operative Societies Act, 1964. The society is providing the services to M/s ONGC on commercial basis at commercially agreed upon terms and conditions. However, in the present case there is nothing on record to show that they were providing the services on a non-commercial basis and without any profit to the society. Thus in the absence of any evidence in this regard to show that the society is providing the services on non-commercial basis, the service provider s contention that they are not commercial concern cannot be accepted and hence they are liable to pay the service tax w.e.f 16.6.2005 onwards. As regards period after 1.5.06, the society is liable to pay service tax within the meaning of Person included in the definition in the statute. There are no reason to interfere with the detailed and considered decision given by the Adjudicating Authority - appeal filed by appellant dismissed.
Issues Involved:
1. Whether the appellant, a society registered under the Andhra Pradesh Co-operative Societies Act, 1964, is liable to pay service tax for providing Manpower Recruitment or Supply Agency services to ONGC. 2. Whether the appellant's contention that they are not a commercial concern and thus not liable for service tax is valid. 3. Whether the extended period for demand and penalties under the Finance Act, 1994, is applicable. Summary: Issue 1: Liability to Pay Service Tax The appellant, a society registered under the Andhra Pradesh Co-operative Societies Act, 1964, provided Manpower Recruitment or Supply Agency services to ONGC during 2005-06 to 2009-10. The Adjudicating Authority confirmed the demand for service tax, stating that service tax is required to be paid when services are rendered by "any person" to "any person," including societies. The appellant failed to attend hearings and provide necessary details, leading to an ex-parte decision. Issue 2: Commercial Concern The appellant argued that being a cooperative society, they should not be considered a commercial concern and thus not liable for service tax. However, the Adjudicating Authority referenced the Central Board of Excise & Customs Circular No. 96/7/2007-ST and various judicial precedents, concluding that the society operates on a commercial basis, charging for services and maintaining payrolls and statutory obligations. The society was thus deemed a "person" under Section 3(42) of the General Clauses Act, 1897, and liable for service tax. Issue 3: Extended Period and Penalties The extended period for demand was justified due to the appellant's non-cooperation and failure to furnish required information, indicating malafide intention to evade tax. The Adjudicating Authority imposed penalties under Sections 77 and 78 of the Finance Act, 1994, but reduced the penalty under Section 78 if the appellant paid the determined service tax, interest, and reduced penalty within thirty days. Conclusion: The Tribunal upheld the Adjudicating Authority's detailed and considered decision, confirming the demand of Rs.91,03,830/- for service tax, along with interest and penalties, and dismissed the appeal filed by the appellant. The decision was pronounced in open court on 22.09.2023.
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