The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad set aside service tax demand on no proof for Manpower Recruitment and Supply Agency Service.
On the basis of intelligence an inquiry was conducted and a statement of Shri Om Prakash R. Mali, proprietor of the Appellant, Metadin Mali has been recorded and he produced the copies of Bills raised to M/s Pino Bisazza Glass Pvt. Ltd., Kadi for providing Labour Contract Services. He rendered this service since 16.06.2005 without obtaining service tax registration though the turnover has exceeded Rs. 4 Lakhs during the period 16.06.2005 to 31.03.2006. After investigation, a show cause notice was issued to the Appellant demanding services tax of Rs. 90,378/- under Section 73 of the Finance Act, 1994 read with Rule 6 of Service tax Rules 1994 alongwith interest under Section 75 of the Finance Act, 1994 and penalty under Section 77 and 78 of the Finance Act 1994.
The appellant contested the issue on merits and appeared for the personal hearing granted by the adjudicating authority. The adjudicating authority after following due process of law, confirmed the service tax demands raised under the manpower recruitment agency service along with interest and also imposed penalties. The appeal preferred against such order was also rejected by the Commissioner (Appeals). Being aggrieved, the appellant is in appeal before the Tribunal.
A Division Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “There is no specific mention about deployment of labour/work force, the services provided by the appellant should not fall under the taxable category of manpower recruitment or supply agency service. Thus, under the facts and circumstances of this case, it cannot be said that the appellant had provided the Manpower Recruitment and Supply Agency Service. Hence, we are of the considered view that the service tax demands confirmed on the appellant cannot be sustained.”
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