2014 (2) TMI 1002 - AT - Service Tax

Waive of pre-deposit - Security Agency Services / Man Power Recruitment Supply - Classification - Applicant have supplied para-medical staff to M/s. ESIC - Held that - Applicant have been receiving the payments for supply of the para-medical staff on monthly basis, not on the basis of average work rendered or the performance of the staff supplied. - Applicant had rendered the Services of Man-Power Supply to its clients. - prima facie case is against the assessee. Regarding Conservancy and Watch & Ward Service - Held that - prima facie, the services rendered by the Applicant, are in the nature of Security Agency Services. Applicant could not able to make out a prima facie case for total waiver of the predeposit of dues adjudged and the Applicant had not pleaded any financial hardship. - stay granted partly.

Summary

Issues: Application for waiver of predeposit of Service Tax and penalties under various sections of the Finance Act, 1994.

Analysis:
1. The Applicant sought waiver of predeposit of Service Tax amounting to Rs.80.38 lakh and related penalties under Sections 76, 77(2), and 78 of the Finance Act, 1994. The demand included charges for Security Agency Services/Man Power Recruitment Supply Services and other services. The Applicant argued that the supply of para-medical staff to M/s. ESIC involved more than mere manpower supply as the staff performed necessary services for the client. The Applicant contended that certain demands were beyond the scope of the show cause notice. The Advocate cited relevant tribunal decisions to support the argument.

2. The Revenue, represented by the ld. AR, supported the findings of the ld. Commissioner. It was argued that payments received for para-medical staff were on a 'per person basis', distinguishing them from the lump-sum payments in the cited case laws. Regarding 'Conservancy and Watch & Ward Services', the AR asserted that these services were akin to security services regardless of nomenclature. The AR emphasized that the show cause notice was based on gross amounts in the balance sheet and ST-3 returns, and the demands were confirmed after considering the Applicant's explanations. The ld. Adjudicating Authority upheld the demands against various services rendered by the Applicant.

3. Upon hearing both sides and examining the records, the Tribunal found that the Applicant supplied para-medical staff on a monthly basis without consideration for work performance, thus constituting 'Man-Power Supply' services. The Tribunal agreed with the ld. Commissioner's analysis that the services provided were akin to Security Agency Services. The Tribunal noted that demands against other services were based on the balance sheet, and the ld. Adjudicating Authority's findings were upheld. The Tribunal concluded that the Applicant failed to establish a prima facie case for total waiver of dues and directed a 25% deposit of the confirmed service tax amount within eight weeks. Failure to comply would lead to dismissal of the Appeal without further notice.

4. The Tribunal's decision was based on a detailed analysis of the services provided by the Applicant, the nature of payments received, and the scope of demands raised. The Tribunal emphasized the importance of financial compliance and the legal principles governing stay applications. The judgment highlighted the need for the Applicant to adhere to the directed deposit to avoid dismissal of the Appeal. The decision balanced the interests of the revenue with the Applicant's obligations under the Finance Act, 1994.