2010 (5) TMI 326 - AT - Service Tax

Security Agency Services and Manpower Recruitment Agency Service - not take any registration and did not discharge the service tax liability - imposed penalties and directed for payment of interest on the service tax liability which was confirmed by the authority - appellant are not rendering any Manpower Recruitment Agency service - only issued receipts for enrolment of people for matrimonial alliances, which cannot be considered as Manpower Recruitment Agency service - in order to justify their claim, they need the bill books which are under the safe custody of Central Excise Head Quarters, Preventive and it was not given to them - bill books were verified by the adjudicating authority on their back and a finding has been recorded - 95 per cent of the amount is paid as salary to the security guards Held that - bill books on which their reliance was placed and contracts/agreement with MESCOM, as regards the deputation of required number of security guards (armed/unarmed), both sides could not produce the same - remand the matter back to the adjudicating authority to re-consider the issue afresh

Summary

Issues:
1. Service tax liability on 'Manpower Recruitment Agency Service'
2. Service tax liability on 'Security Agency Services'

Analysis:
1. Service tax liability on 'Manpower Recruitment Agency Service':
The appellants contested the demand of service tax liability on the grounds that they did not provide Manpower Recruitment Agency services but only issued receipts for matrimonial alliances. They argued that the bill books necessary to support their claim were held by the Central Excise authorities and were not provided to them for verification. The appellants requested an opportunity to justify their position with the necessary documentation. The Tribunal noted the absence of crucial documents and remanded the matter to the adjudicating authority for a fresh consideration. The authority was directed to provide the appellants with copies of the relevant documents seized during the investigation and to decide the issue within four months while ensuring natural justice principles are followed.

2. Service tax liability on 'Security Agency Services':
Regarding the Security Agency Services provided to MESCOM, the appellants contended that they acted as agents for disbursing salaries to security guards supplied to MESCOM. They claimed that 95% of the payment received from MESCOM was used as salaries for the guards, with the remaining 5% retained as commission, on which they had already paid the service tax. Despite the arguments, the lower authorities upheld the demands. The Tribunal observed that critical documents such as the agreement with MESCOM and bill books were not presented by either party. Due to the lack of essential information, the Tribunal set aside the previous orders and remanded the case to the adjudicating authority for a thorough reconsideration. The authority was instructed to provide the appellants with copies of the relevant documents seized during the investigation and to decide the matter within four months, adhering to the principles of natural justice.

In conclusion, the Tribunal found that a proper assessment of the issues required a factual examination based on the contents of agreements and documents that were not available during the proceedings. As a result, the Tribunal set aside the earlier decisions and remanded the cases back to the adjudicating authority for a fresh review, emphasizing the importance of providing the appellants with access to the necessary documents and ensuring a timely resolution in accordance with natural justice principles.