2003 (5) TMI 134 - AT - Central Excise

Summary

Issues involved:
1. Confirmation of demand under Service Tax Act treating the appellant as a security agency.
2. Appellants' registration under Man Power Recruitment Agency and subsequent registration as a Security Agency.
3. Dispute regarding deductions and valuation for service tax purposes.
4. Allegations of intention to evade payment of service tax.
5. Justifiability of the demand for six months from the date of receipt of show cause notice.

Analysis:

1. The appeal arose from an Order-in-Appeal confirming the demand on the appellants under the Service Tax Act, treating them as a security agency. The Commissioner (Appeals) concluded that the appellants did not intend to evade payment of service tax under Section 78, setting aside the penalty. The appellants were directed to register under the Man Power Recruiting Agency, but they contended that they did not fall under that category. They registered under the Man Power Recruitment Agency initially and later as a Security Agency. The Commissioner noted that the department was aware of the situation but did not object to their continuation under the Man Power Recruitment Agency.

2. The Advocate for the appellants argued that the demand was not justified as there was no failure on their part to file returns under the Finance Act. The department insisted on them filing returns as a Man Power Recruiting Agency, and as the liability to pay service tax as a security agency did not arise, the show cause notice was deemed unsustainable. The Revenue contended that the appellants should have filed returns and paid tax as security agents from the inception.

3. The Tribunal remanded the matter to the original authority to consider the appellants' prayer for deductions in accordance with the law and circulars. The Commissioner did not provide a conclusion on valuation and deductions, which was deemed necessary. The confirmation of demand for six months from the show cause notice date was considered justifiable under Section 73 of the Act. The authorities were directed to rework the liability after determining valuation and deductions as per the law.

This detailed analysis covers the issues involved in the legal judgment comprehensively, outlining the arguments presented by both parties and the Tribunal's decision regarding the demand, registration, deductions, intention to evade payment, and the justifiability of the demand period.