2024 (2) TMI 963 - AT - Service Tax

Classification of services - Port services or manpower recruitment and supply agency service? - rendering the service to stevedores - Demand sought to be recovered under the category of manpower recruitment and supply agency service by invoking extended period of limitation. Classification of services - Port services or manpower recruitment and supply agency service? - rendering the service to stevedores - HELD THAT - The appellant is rendering the service to stevedores during the impugned period and the Revenue seeks demand of service tax under the category of Port Servie which has been extended w.e.f. 01.07.2010, whereas the period pertains to prior to that, in that circumstances, in the light of the decision of the Konkan Marine Agencies 2023 (2) TMI 991 - SC ORDER , it is held that the activity undertaken by the appellant does not fall under the category of Port Service , therefore, whole of the demand confirmed for the said period, is not liable to be taxed under Port Service . Accordingly, no demand can be raised for the short payment of tax under Port Service during the impugned period - Appeal allowed. Demand sought to be recovered under the category of manpower recruitment and supply agency service by invoking extended period of limitation - HELD THAT - In this case, the Revenue has travelled into two boats, one to demand the service tax under Port Service and another to demand under the category of manpower recruitment and supply agency service , therefore, extended period of limitation is not invokable. In that circumstances, the demand pertains to the extended period is not sustainable, accordingly, the same is set aside. Period of demand within limitation - HELD THAT - In the facts and circumstances of the case, the appropriate classification of service is Port Service , whereas the demand has been sought to be recovered by issuance of show-cause notice under the category of manpower recruitment and supply agency service , therefore, the demand under the category of manpower recruitment and supply agency service , is not sustainable. Period October, 2002 to October, 2006 - HELD THAT - The appellant has collected the service tax from the service recipient and the same has paid to the Revenue, therefore, if the appellant is held to entitle the refund claim, but by giving refund to the appellant, the appellant shall be enriched unjust. Therefore, whole of the amount of service tax collected from the service recipient during the impugned period, shall go to the Consumer Welfare Fund, although the activity does not fall under the category of Port Service - the said appeal for granting refund to the appellant is dismissed.

Summary

Issues involved: Determination of whether the activities of the appellants fall under the category of "Port Service" and whether the appropriate classification of the services provided is under "manpower recruitment and supply agency service."

Summary:

Appeal No. ST/75390/2023:
The appellants were engaged in various activities related to labor supply at the port. A show-cause notice was issued for demand of service tax under "Port Service" and short payments of service tax. The issue was whether the activities fell under "Port Service" or not. The appellants argued that the issue had been settled by a Supreme Court case, and thus, the demand under "Port Service" was not sustainable. The Tribunal held that the activities did not qualify as "Port Service," and therefore, no demand could be raised for the period in question. The appeal was allowed.

Appeal No. ST/71515/2013:
This appeal pertained to a demand under "manpower recruitment and supply agency service" for a specific period. The Revenue sought to recover tax under both "Port Service" and "manpower recruitment and supply agency service." The Tribunal found that the demand under "manpower recruitment and supply agency service" was not sustainable, and the extended period of limitation was not invokable. The appropriate classification of service was determined to be "Port Service," and the demand under "manpower recruitment and supply agency service" was set aside. This appeal was allowed.

Appeal No. ST/298/2009:
For the period in question, the appellants had collected service tax from service recipients and paid it to the Revenue. The issue was whether the appellants were entitled to a refund claim. The Tribunal held that although the activity did not fall under "Port Service," granting a refund would unjustly enrich the appellants. Therefore, the entire amount of service tax collected during the period was directed to go to the Consumer Welfare Fund. The appeal for granting a refund was dismissed.

Conclusion:
The Tribunal ruled in favor of the appellants in Appeal No. ST/75390/2023 and Appeal No. ST/71515/2013, while dismissing the appeal in Appeal No. ST/298/2009. The activities of the appellants were found not to fall under the category of "Port Service," and the demands under "manpower recruitment and supply agency service" were deemed unsustainable.