Supply of Manpower as Accounts Executive is Manpower Supply Services: CESTAT quashes Service Tax Demand [Read Order]

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and noted that the supply of manpower as accounts executive is manpower supply services.

The appellant, M/s. Mars Mountain Security Services Private Limited, has filed this appeal against the impugned order where demand of service tax has been confirmed against the appellant under the category of ‘manpower recruitment agency service’ and ‘security services’.

A show cause notice was issued to the appellant as revenue was of the view that the service of manpower supply and housekeeping service were qualified under manpower recruitment agency service, therefore, the appellant has not paid service tax during the impugned period which was taxable w.e.f. 1998.

It was the submission of the appellant that except security services, all other services were not taxable before 16.06.2005 and the appellant has not paid service tax for the period prior to 16.06.2005 on the said services, but after 15.06.2005, the appellant has paid service tax thereon. The service tax was payable by the appellant only on the security services and on the said service the appellant has already paid entire amount of service tax.

It was further submitted that the demand against the appellant is barred by limitation as demand is for period October 2001 to March 2006, whereas the show cause notice was issued on 29.08.2006, which is beyond the normal period of limitation.

A Two-Member Bench comprising Ashok Jindal, Judicial Member and K Anpazhakan, Technical Member observed that “On going through the work orders placed before us, which clearly depicts that the description of the scope of the work order is supply of manpower as accounts executive, store-keeper, draftsman etc. Going through the work order, we do not find that the activity undertaken by the appellant is manpower recruitment agency service as the appellants are supplying manpower to their service recipients.”

“In those circumstances, we hold that the activity undertaken by the appellant do qualify under manpower supply services and not manpower recruitment agency services. The appellant was liable to pay service tax is security service on which the appellant has already discharged service tax” the Bench concluded.

Image: https://images.app.goo.gl/59NGRTv34cLvT21c7

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates