2007 (2) TMI 88 - AT - Service Tax

MRA Service Appellant claim for refund claim of amount which is paid by him in respect of MRA service by mistake Held that appellant contention is correct and allowed the appeal

Summary

Issues:
1. Whether the appellant rendered 'Manpower Recruitment Agency Services' or simply supplied man power.
2. Whether the appellant is entitled to a refund of the service tax paid for the man power supply contracts.
3. Interpretation of the agreement between the appellant and the University at Jodhpur regarding man power supply.
4. Applicability of service tax on man power supply before and after 16-6-2005.

Analysis:
1. The appellant had contracts for "man power supply" and paid service tax on the amount received. The issue was whether the appellant provided 'Manpower Recruitment Agency Services' or merely supplied man power. The lower authorities held that the supply of skilled manpower involved recruiting, thus falling within the scope of recruitment service.

2. The appellant claimed a refund of the tax paid, arguing that they did not carry out any recruitment service. The Tribunal noted that the agreement clearly stated the supply of man power and not recruitment. The appellant emphasized that the supplied man power did not become part of the hiring organization. The Tribunal found that the appellant did not recruit personnel for the University and had no authority to do so.

3. The Tribunal analyzed the agreement with the University at Jodhpur, which approved the appellant's rates for providing staff. The agreement highlighted the supply of man power at approved rates, indicating a clear distinction from recruitment services. The relationship between the parties was not one of recruitment of staff by one for the other, further supporting the appellant's claim for a refund.

4. The Tribunal considered the applicability of service tax on man power supply before and after 16-6-2005. It was noted that before this date, man power supply did not attract service tax. The Tribunal concluded that the original payment made by the appellant was erroneous and warranted a refund. The revenue's argument of passing on the tax amount was refuted based on evidence showing no service tax passed on to the recipient.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellant. The judgment emphasized the distinction between man power supply and recruitment services, ultimately supporting the appellant's claim for a refund based on the nature of the services provided and the absence of recruitment obligations.