2012 (7) TMI 629 - AT - Service Tax

Manpower Supply Service - Appellant had undertaken the job of feeding of husk into the boiler in the factory of manufacturer and received consideration for the service provided - whether the appellants were undertaking the job of feeding husk into boiler or whether he was supplying man power Held that - There was confusion in understanding the scope of the levy penalty and demand set aside appeal allowed

Summary

Issues:
1. Whether the Appellant should have paid service tax for providing services at M/s Vishal Papertech (India) Ltd.
2. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994.
3. Legal validity of the order issued by the Commissioner (Appeals) setting aside the demand and penalties.

Analysis:
1. The Appellant provided services at M/s Vishal Papertech (India) Ltd. and received consideration, leading the Revenue to demand service tax under Manpower Supply Service. A Show Cause notice was issued for the same, resulting in the confirmation of service tax amounts for specific periods. Penalties were imposed under Sections 76, 77, and 78 of the Act. The Appellants appealed against this order before the Commissioner (Appeals).

2. During the appeal process, the Commissioner issued a Show Cause Notice exercising revisionary power under Section 84 of the Finance Act, 1994, citing combined penalty imposition under Sections 76 and 78 as improper. Subsequently, penalties were imposed for specific periods under the mentioned sections. The Appellants appealed against this order as well.

3. The Counsel for the appellant argued that the Commissioner (Appeals) had set aside the demand and penalties in the appeal against the initial adjudication order. The Counsel contended that currently, there was no duty demand against the appellants, but penalties imposed under Section 76 and 77 by the Commissioner's order under Section 84 were still in effect. The Revenue's representative highlighted uncertainty regarding the finality of the Commissioner (Appeals) order of 24.6.2011.

4. The judge considered the arguments and noted the confusion regarding whether the appellants were providing services or supplying manpower. Given the differing conclusions reached by the Commissioner (Appeals), the judge deemed a penalty on the appellants unjustified. The judge concluded that the impugned order should be set aside, allowing the appeal.

In conclusion, the judgment favored the appellants, setting aside the impugned order and penalties imposed, highlighting the confusion surrounding the nature of services provided and emphasizing the need for clarity in understanding the levy.