"Manpower Recruitment or Supply Agency": Appellants contended that they acted only as pure agent : Evidences not produced : Contract does not show that they acted as pure agent : Partial stay granted.

Service Tax: Manpower Recruitment and Supply Agency Service: Show cause notice being foundation for making allegation that must clearly bring out the charge against the assessee depicting the gravity of the charge and basis. Unable to notice the charge with a basis in the show cause notice for which the proceeding cannot be sustained. Dismiss the appeal of Revenue on the aforesaid reasoning. (para 3)

Service Tax: Manpower supply service: Demand: There was no formal agreement between the appellant-trust and the sugar factory prior to 2.6.2005. The impugned demand of service tax is partly for the period prior to 2.6.2005, for which period, no evidence, whatsoever, has been adduced by the assessee to show that their activity did not constitute 'manpower supply' service.(Para2). Partial pre-deposit is ordered.(Para 3). 

Service Tax: Manpower Recruitment or Supply Agency: Penalty: It cannot be held that the assessee could manage the affairs of her business during the material period but could not pay the tax due owing to the mental strain and pressure suffered by her during the same period. This penalty is reduced to an amount equal to the tax demanded. The appeal is disposed in the above terms. (para 4)

Service Tax: Manpower Recruitment Agency: Demand: Adjudication: The definition of ‘manpower recruitment or supply agency’ prior to 01.05.2006, was indicating “any commercial concern” engaged in providing any service, directly or indirectly, in any manner for recruitment of supply of manpower, temporarily or otherwise, to a client. However with effect from 01.05.2006, the words “commercial concern” have been replaced by the words “any person”. This would indicate that prior to 01.05.2006, services rendered by the institutes which are not commercial concern would not fall under the service tax net. Since the issue involved in this case is prior to 01.05.2006 is squarely covered. The impugned order passed by the Commissioner (Appeals) is correct and legal and does not suffer from any infirmity. The appeal filed by the Revenue is dismissed. Cross Objection filed by the assessee in support of the impugned order is also disposed.(Para 5)

Service Tax: Manpower Recruitment and Supply Agency Services: Penalty: The order of the Commissioner (Appeals) is silent on the factors relied upon by the Additional Commissioner in exercising the discretion under Sec. 80 of the Finance Act. Further, the Commissioner (Appeals) has not chosen to impose any penalty himself. He has again left it to the original authority. In view of the above, the order of the Commissioner (Appeals) insofar as the same related to direction to the original authority to consider imposition of penalty is set aside and the appeal is allowed with consequential relief as per law. (para 5.3)

Service Tax: Manpower recruitment or supply agency services: Reimbursable expenses: Reimbursement of actual expenses : Pre-deposit : Considering the fact that only a small tax amount of Rs. 41,967/- is involved in this case, the requirement of predeposit needs to be waived. (para 4)

Service Tax: Man power recruitment and supply agency service: Remand : There are contradictory facts emerging from the bill raised by the appellant, the ledger of the appellant and the ledger of the recipient. Under these circumstances the case becomes an arguable one and the facts as to what exactly is the service rendered and the remuneration does not become clear. Under these circumstances it is appropriate that the Commissioner consider the issue on merit without insisting on pre-deposit. (para 2).

Service Tax: Manpower Recruitment or Supply Agency's Service / Information Technology software services: Taxable event Demand: The documentary evidence, in particular, bills produced by the appellants clearly disclose the activity of the appellants to be in the nature of providing Manpower Recruitment and Supply Agency services and this is also apparent from the statement of the Managing Director of the appellants. Therefore, the authority below has correctly held that the services rendered by the appellants are in the nature of Manpower Recruitment and Supply Agency services,(Para 5).  

Service Tax: Manpower supply services: Security Services: No overlapping of demands: It clearly stated that Annexures I & II relates to the total taxable amount of services rendered and billed in respect of security service whereas Annexure-III relates to the total taxable amount of services rendered and billed in respect of manpower supply services. (para 4)

Service Tax: Extended period of limitation: To contend that the demand is barred by limitation, it is necessary for the assessee to point out that the facts, which were alleged to have been suppressed, were within the knowledge of the department. No such efforts have been made on behalf of the appellant in the matter in hand. In the case in hand, some of the clients of the assessee had admitted the collection of service tax by the appellant. Yet there was no explanation forthcoming from the appellants for non-payment thereof to the department which clearly justifies invocation of extended period of limitation (para 5,7)

Service Tax: Manpower supply services: Security Services: Pre-deposit : In the facts and circumstances of the case, therefore, we do not find any prima face case having been made out for grant of stay of impugned order or for total waiver of the amount demanded under the impugned order. (para 9)

Manpower Recruitment or Supply Agency: Looking to the nature of services rendered by appellants as per Contract, the services do not fall under this category: Stay granted.

Service Tax: Manpower recruitment Service: Penalty: Section 73(3): Waiver of Show Cause Notice: In this case the show cause notice was issued after one year and that too after the assessee had already paid the service tax with interest. Therefore the assessee is clearly covered by the provisions of Section 73(3) was of Finance Act, 1994. This is also a fit case for lenient view by applying the provisions of Section 80 of Finance Act, 1994. Accordingly, the appeal filed by the appellants is allowed by setting aside the penalty under Section 76 of Finance Act, 1994.(para 4)

Service Tax: Advertising Services: Cenvat Credit: Input: Stay: All goods except light diesel oil, high speed diesel oil and motor spirit, are eligible for availment of Cenvat credit. The appellant has made out a prima facie case for waiver of pre-deposit of the amounts adjudged by the adjudicating authority and upheld by the Commissioner (Appeals). (para 5)

Service Tax: Manpower Recruitment Agency Service: Penalty cannot be imposed in the absence of fraud, suppression: The decision of the Tribunal cited also held that penalty was not imposable under Section 78 in the absence of any fraud, suppression on the part of the assessee. Respectfully following the ratio of the judgment of the Hon’ble High Court in CCE, Jalandhar Vs. Darmania Telecom (supra), the penalty imposed on the appellants is set aide and the appeal is allowed. (para 8.1,9)

Service Tax: Port Services: Pre-Deposit: Tribunal decision in the case of Velji P. & Sons, which stands confirmed by the Hon'ble Supreme Court, is prima-facie applicable to the facts of the instant case. It stands held in the said judgment that activity of handling, loading, unloading and labour arrangements etc. does not fall under category of port services and there is a difference between licence and authorizations. The appellant is entitled to unconditional stay in respect of demands confirmed on the services rendered by them, by treating the same as port services. (para 3)

Service Tax: Manpower, recruitment or supply agency services: Pre-deposit: An amount of Rs. 2.35 lakhs approximately relate to the salaries paid to foremen/khalasees etc. which stand covered under the service of 'manpower, recruitment or supply agency services. The appellant should be directed to deposit the amounts in question. (para 4)

Service Tax: Manpower Recruitment Services: Liability on the amount realized: The service tax liability is obviously subject to realisation of the service charges. Merely because bills have been received by the appellant and the said bills have been reflected in the books of accounts, the service tax is not payable unless the amount is realised. The appeal of the party in respect of service tax demand relating to five bills which was disallowed by the Commissioner (Appeals) is allowed. Accordingly, the penalty is also proportionately reduced. (para 6,7)

Service Tax: Manpower Recruitment and Supply Agency Service: Penalty: Remand: Board's Circular No.97/8/2007-ST dated 23.08.2007 (supra) relied upon by the Appellant, provides that no show cause notice will be issued, in case the amounts of Service Tax and Interest have been paid in a case, where there is no suppression of facts with intent to evade payment of duty. In the present case, when pointed out by the Revenue, the Appellant immediately deposited the amount of Service Tax along with the interest. In these circumstances, The impugned Order is accordingly set aside and the matter is remanded to the Commissioner of Central Excise to decide the matter afresh regarding imposition of penalty after affording an opportunity of hearing to the Appellant. (para 5)

Service Tax: Manpower recruitment service: Commercial training service: If it is accepted that the same manpower will be providing specialized functional services to Pfizer in the second phase of the contract, it is logical to conclude that the manpower has been retained with the appellants during the first phase and not supplied to Pfizer though recruitment of manpower has no doubt been done at the instance of Pfizer. The assistance in recruitment and imparting of specialized training for the recruited personnel cannot be held against the appellants' claim that they have not supplied the manpower but have merely recruited and retained the same for providing specialized services to Pfizer utilizing such manpower. The nature of services required to be provided by the appellants are in the nature of information technology services as the same relates to data management. The appellants are not liable to pay service tax in respect of the services provided by them to Pfizer under the impugned contract. They are eligible for the small scale exemption in respect of the small value of services provided by them to M/s. SAP LABS India Pvt. Ltd. which is below the exemption limit of Rs. 4 lakhs. The impugned order is set aside and the appeal allowed (para 10,11)

Service Tax: Manpower recruitment services: The appellants have deputed skilled personnel including computer engineers to work under the supervision and control of TCS and Infosys personnel in-charge of projects undertaken by TCS and Infosys. The appellants are getting paid in terms of the man hours for the persons deputed to work under the control and supervision of TCS and Infosys. The relevant clauses in the contract in this regard on which much emphasis was sought to be put by the learned senior counsel for the appellants have to be viewed in the light that TCS and Infosys are merely seeking to obtain personnel from the appellants with necessary skill who will work diligently on the projects undertaken by TCS and Infosys. If the appellants were actually to deliver the software projects, TCS and Infosys would have nothing to say about how many personnel the appellants engage to complete the project or who they employ. The appellants are only supplying skilled manpower for which they are liable to pay service tax for supply of manpower services. For similar activities of the appellants in respect of two other clients namely IBM and CAP GEMINI, the appellants have paid service tax under the category `manpower supply service' and their clients in turn took credit of such service tax paid by the appellants. The demand of service tax, cess and interest and imposition of penalty under Section 76 in respect of both the appeals confirmed. (para 12, 13.14,15,16, 17)

Service Tax: Manpower recruitment services: Penalty under Section 78: The penalty, imposed under Section 76 meets the ends of justice and hence no separate penalty under Section 78 is warranted specially keeping in view the fact that penalties under Section 76 and Section 78 have been made mutually exclusive by amendment of the law subsequently. Accordingly the penalty imposed under Section 78 is set aside. (para 17)

Service Tax: Manpower Recruitment or Supply Agency service: Lump-sum work: Entire tenor of the agreement and the purchase orders issued by the appellants’ service recipient clearly indicates the execution of a lump-sum work. This lump-sum work would not fall under the category of providing of service of supply of manpower temporarily or otherwise either directly or indirectly. Impugned order set aside

Manpower Recruitment Agency: The service in question consisted of deputation, to the appellants, of technical personnel by their foreign collaborators. It is not in dispute that this activity for the period from 01.01.2005 is classifiable as 'Manpower Recruitment Supply Service' under Section 65 of the Finance Act, 1994. However, for the prior period, the department is seeking to collect service tax from the appellants in respect of the same activity, under the head ‘Management Consultancy Service'. Waiver granted on the basis of earlier decisions of Tribunal.

Manpower Recruitment Agency : Appellants only providing labour and not undertaking the activity of recruiting manpower for anyone. prior to 16-5-2005, the definition of ‘Manpower Recruitment Agency’ did not include supply of manpower and it is only after the amendment in May, 2005 that, the definition was inserted so as to include supply also for the purpose of service leviable to service tax. Issue covered by Tribunal’s decision in the case of Dinesh Kumar & Co.

Manpower Recruitment Agency : Appellants supplying only manpower covered under ‘Manpower Recruitment Agency’ from the date when it was introduced. Department proceeded to cover the same activity under the category of ‘Cargo Handling Service’ for the previous period. Relying upon its earlier decisions held that supply of manpower cannot be equated with Cargo Handling Service.

Manpower Recruitment : Supply of manpower will not amount to ‘recruitment of manpower’. W.E.F 16-6-2005 service tax leviable on “manpower recruitment or supply agency” which means “any commercial concern engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to a client.”

Stay: Appellants were admittedly supplying manpower to various clients and the department sought to levy service tax under heading Manpower Recruitment agency services. Board’s Circular No. B1/6/2005 -TRU dt. 27-7-2005, clarifies scope of manpower recruitment service prior to 16-6-2005 and simultaneously explained the expansion of the scope of the service from 16-6-2005. Appellants are paying service tax after 16-6-2005. Prima facie case found. Stay granted.

Manpower Recruitment Agency: Payments received in foreign exchange. No evidence produced for receipt of foreign exchange, exemption denied.  Entire service tax deposited, waiver for balance amounts of interest and penalties waived as appellants pleaded that they would produce evidence at final stage.

Service Tax: Reimbursement of expenses: Liability: Demand is on certain amount reimbursed to the appellants by the service recipient towards fixed expenses for supply of human resources in terms of Article 6 of the relevant Agreement. The same provision of the Agreement had also enabled the appellants to receive a consolidated fixed commission per month from the service recipient. On this commission, received during the above period, appellants paid tax. The appellants have made out pima facie case on the strength of an earlier order of this Bench in a similar case viz. Sangamitra Services Agency v. CCE Chennai-IV - STO 2005 CESTAT 178 (Para 2).

Pre-deposit waived, stay granted.
 

Service Tax: Manpower Recruitment Agency or Supply Agency: Stay: There is no finding recorded on the plea of limitation and on time bar. Furthermore, the burden to levy the tax has to be discharged by the Revenue in the present case. The appellants contend that the activity was brought within the Finance Act on 16-6-2005. There is substance in this argument. The appellants have made out a strong case on merits.(Para 4).

Stay application allowed and pre-deposit waived.
 

Service Tax: Manpower Recruitment: Liability on charitable institutions: The respondent is a unit of DIOCESE of Mangalore. The respondent organization imparts training to youth in leadership and later, finds some placement for them. For these services, some fee is charged. Revenue takes the view that if some fee is charged for a service, then it becomes a commercial activity. This view is not at all correct. In the absence of definition of 'Commercial concern' in the Finance Act, 1994 and Service Tax Rules, we have to adopt the popular meaning of the expression 'Commercial concern'. The Oxford Advanced Learner's Dictionary gives the following definitions of 'commercial' as (i) connected with the buying and selling of goods and services; (ii) (only before noun) making or intended to make a profit. The definition used in the statute for Manpower Recruitment is 'Manpower Recruitment Agency' means any Commercial concern engaged in providing service, directly or indirectly, in any manner for recruitment of manpower, to a client. The fee is not a consideration given by a client to the Manpower Recruitment Agency. Revenue has not shown with evidence that the Organizations where the youth are employed paid any consideration to the respondent. The Audited Accounts of the respondent unit reveal that they had not made any profit out of these activities. Respondent is not a 'Commercial concern'. Therefore, they are not liable to pay any Service Tax under this category.(Para 6).
Revenue appeal dismissed.

Service Tax: Man power recruiting agency / Management consultancy services: Waiver of pre-deposit: As management consultant the appellants' plea that they are not providing any service which can be classified as an advice, technical assistance, consultancy so as to qualify being covered as a management consultant has considerable force. However, it is admitted fact that they are providing services relating to management and since the management consultant has been defined as any person who is engaged in providing any service, either directly or indirectly in connection with the management of any organisation, the appellants have not been able to make out a case for full waiver of pre-deposit.(Para 4).

Pre-deposit ordered.
 

Service Tax: Manpower Recruitment Agency: Charitable institution: The Respondent was brought under the Service Tax net under the category Manpower Recruitment Agency. The respondent contested the case on the ground that they are charitable and religious trust recognized by the Income Tax Department and contended that they have not carried out any activity which was commercial in nature. This has been accepted by the Commissioner, Service Tax has already been refunded and hence the stay application is infructuous.(Para 3,4).
Stay application of revenue rejected.

Stay : Security Agency : As regards security personnel, the nature of the service is of only making provision for arranging the security personnel. It is activity of providing security personnel which would be services. Therefore, prima facie, salary payable to the security personnel would stand on a different footing than the services provided by the security agency to procure the security personnel for the client. Waiver granted.