2013 (11) TMI 43 - AT - Service Tax

Manpower Recruitment or Supply Agency Service - Supply of drivers for transportation - Waiver of pre deposit - Classification of service - Held that - Prima facie, we find that the Applicant are engaged in transporting/transferring the chassis from the factory of M/s. TELCO to its various destinations. The Applicant received the value of services on the basis of distance for which the chassis were transferred by them. We do not find merit in the observation of the ld. Commissioner that since drivers were supplied by the Applicant for movement of the chassis, vehicles etc., therefore, the amount received for transferring the vehicles, chassis etc. would come under the head of Manpower Recruitment or Supply Agency Service . We also take note of the fact that the Applicant had been registered from October, 2006 under the category of Business Support Service and discharging service tax on the said services rendered. In these circumstances, we are of view that the Applicant could able to make out a prima facie case for total waiver of predeposit of the dues adjudged. - Stay granted

Summary

Issues: Application for waiver of predeposit of Service Tax and penalty under Section 78 of the Finance Act, 1994 and penalties under various provisions of the said Act.

Analysis:
1. The applicant sought waiver of predeposit of Service Tax and penalties imposed under various provisions of the Finance Act, 1994. The applicant, engaged in transporting chassis from a factory to various destinations, argued that the services provided were wrongly classified as 'Manpower Recruitment or Supply Agency Service' by the Department. The applicant contended that payments were based on distance, not person-wise, and thus did not fall under 'Manpower Supply Service'. The Revenue, represented by the ld. AR, supported the findings of the ld. Commissioner.

2. The Tribunal examined the submissions and noted that the applicant's services involved transporting chassis based on distance, with payments received accordingly. The Tribunal disagreed with the ld. Commissioner's view that supplying drivers for the movement of chassis and vehicles categorized the services under 'Manpower Recruitment or Supply Agency Service'. Additionally, the applicant had registered under Business Support Service from October 2006 and paid service tax under this category for the same services. Considering these factors, the Tribunal found merit in the applicant's argument and granted a waiver of predeposit of the dues adjudged. The recovery of dues was stayed during the pendency of the Appeal, allowing the Stay Petition.

This judgment highlights the importance of proper classification of services for tax purposes and the significance of registration under the correct category to avoid unnecessary disputes and penalties.