2024 (1) TMI 1020 - AT - Service Tax

Classification of services - cargo handling service or manpower recruitment or supply agency service? - HELD THAT - The scope of engagement of the appellant was for cargo handling meant for export. It is not only the statement of the appellant which was recorded on 19.04.2012, the same was much after the reply filed by the CCFS dated 03.04.2012. The service recipient had explained the understanding with the service provider-appellant, which was later on reiterated by the appellant-service provider. The Revenue having brought the reply to their enquiry on record, is not able to dislodge the actual understanding between the parties as to the nature of provision of service. The doubts entertained by the Revenue as to the provision of service under the category of manpower recruitment or supply agency service are without any basis. In any case, the Revenue has not controverted the fact that the activity was in relation to the export of goods and would be exempt from payment of Service Tax. Hence, the demand of Service Tax under the above category, raised and confirmed in the Order-in-Original as well as the impugned Order-in-Appeal cannot sustain, for which reason the impugned order deserves to be set aside. The impugned order set aside - appeal allowed.

Summary

Issues involved:
The dispute relates to the classification of service as "cargo handling service" by the appellant versus "manpower recruitment or supply agency service" by the Revenue.

Summary:
The appeal was filed against the Order-in-Appeal passed by the Commissioner of Customs, Central Excise and Service Tax. The appellant contended that the demand of Service Tax was raised without specifying any fraud or suppression of facts and should be set aside. Reference was made to a C.B.I.C. Instruction stating that services provided by a cargo handling agency meant for export are not liable to Service Tax. The Revenue justified the demand based on findings in the Order-in-Original. The core issue was the classification of service provided by the appellant.

During the investigation, the Revenue recorded statements and made inquiries with the service recipient, CCFS. CCFS denied that the appellant was employed for manpower supply, clarifying that the appellant had provided cargo handling services for export cargo. The appellant's statement confirmed the nature of the services provided for loading and unloading export cargo. It was established that the appellant's engagement was for cargo handling meant for export, and the Revenue could not disprove the actual understanding between the parties regarding the service provided.

The Tribunal found that the doubts raised by the Revenue regarding the service category were baseless. Moreover, as the activity was related to the export of goods, it was exempt from Service Tax. Therefore, the demand of Service Tax under the category of manpower recruitment or supply agency service was not sustainable. The impugned order was set aside, and the appeal was allowed with consequential benefits, if any, as per law.