2025 (2) TMI 590 - AT - Service Tax

Classification of service - Manpower Recruitment Agency service or not - supplying labor and loading/unloading services to a company - Scope of SCN. Classification of service - HELD THAT - The appellant is only supplying the labour on daily basis and also for loading unloading to Markfed but he does not fall under the definition of Manpower Recruitment Agency as provided in Section 65(68) of the Finance Act 1994 and therefore not liable to pay any service tax on the said charges. Scope of SCN - HELD THAT - The impugned order is beyond the show cause notice and the Order-in-Original because in the show cause notice as well as in the Order-in-Original it has not been stated that the appellant has recovered service tax from the Markfed and not deposited the same to the Government Exchequer in terms of the provisions in Section 73(A) of the Act. This finding of the Ld. Commissioner (Appeals) is not sustainable in law as the same is beyond the show cause notice and the Order-In-Original and further alleged services for loading and unloading Taucks/LCV are not covered under manpower recruitment or supply agency as provided in Section 65(68) of the Finance Act 1994. Conclusion - i) The demand for service tax was not justified as the appellant s services did not fall under the category of a Manpower Recruitment Agency. ii) The allegations made in the impugned order went beyond the scope of the original documents and were not supported by the evidence. The impugned order is not sustainable in law - Appeal allowed.

The appeal before the Appellate Tribunal concerned a demand for service tax imposed on the appellant for supplying labor and loading/unloading services to a company. The Commissioner (Appeals) had confirmed the demand, leading to the appeal. The appellant argued that the order was unsustainable as it went beyond the show cause notice and the original order, and that the appellant did not fall under the definition of a Manpower Recruitment Agency. The appellant also contended that the demand was time-barred and that the revenue had failed to prove the necessary elements for invoking the extended period for recovery.The appellant's counsel argued that the impugned order exceeded the scope of the show cause notice and the original order, as it alleged that the appellant had recovered service tax from the company, which was not mentioned in the earlier documents. The counsel also asserted that the appellant did not meet the criteria for a Manpower Recruitment Agency as defined in the Finance Act. Additionally, it was argued that the demand was time-barred, and the revenue had not demonstrated fraud, collusion, willful misstatement, suppression of facts, or contravention of provisions to justify the extended recovery period.On the other hand, the Authorized Representative for the respondent reiterated the findings of the impugned order.The Tribunal analyzed the submissions and evidence presented. It concluded that the appellant's activities did not qualify as those of a Manpower Recruitment Agency under the relevant section of the Finance Act. Therefore, the appellant was not liable to pay service tax on the services provided. The Tribunal also found that the impugned order went beyond the scope of the show cause notice and the original order by alleging recovery of service tax without proper basis. As such, the Tribunal held that the impugned order was unsustainable in law and set it aside, allowing the appeal of the appellant.In summary, the Tribunal ruled in favor of the appellant, holding that the demand for service tax was not justified as the appellant's services did not fall under the category of a Manpower Recruitment Agency. The Tribunal found that the allegations made in the impugned order went beyond the scope of the original documents and were not supported by the evidence. Therefore, the Tribunal set aside the impugned order and provided relief to the appellant in accordance with the law.

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