2010 (8) TMI 351 - AT - Service Tax

Waiver of pre-deposit manpower recruitment and supply services - activity of cleaning has been given as lumpsum job to the appellant - amount has been worked out based upon wages of a single person employed by the assessee - the Manipal Academy of Higher Education has right to reject a candidate who is deputed by the assessee for cleaning services the entire obligation and the responsibility of keeping the area clean as per the agreement is left to the appellant/assessee and their supervisors - prima facie we are of the view that the services rendered by the assessee could not fall under the category of manpower recruitment and supply services - appellant has made out a prima facie case for waiver of the pre-deposit

Summary

Issues Involved:
Whether the appellant provided services under the category of 'manpower recruitment and supply services' for service tax liability.

Detailed Analysis:

1. Background of the Case:
The case involved a stay petition for the waiver of pre-deposit of tax, interest, and penalties imposed on the appellant for alleged service tax liability related to services provided to Manipal Academy of Higher Education and KMCHospital. The Revenue contended that the appellant supplied manpower for cleaning premises, triggering the service tax liability.

2. Appellant's Argument:
The appellant's Chartered Accountant argued that the agreement covered distinct activities of cleaning services and manpower supply services. The appellant maintained that they provided cleaning services as a lump sum job, receiving only 10% as service charges. The agreement specified that the appellant's personnel would work under their supervision and control, indicating a cleaning services arrangement.

3. Revenue's Position:
On the contrary, the Revenue argued that the agreement mandated payment based on wage particulars, including basic wages, DA, PF, and administration costs. They highlighted clauses requiring personnel to be interviewed by the Manipal Academy of Higher Education, emphasizing the control exercised by the institution over personnel selection.

4. Tribunal's Analysis:
After considering both parties' submissions and reviewing the agreement clauses, the Tribunal examined whether the appellant was indeed providing 'manpower recruitment and supply services.' The agreement delineated cleaning operations as a lump sum job for which the appellant was responsible, with payment based on actual wages plus a service charge. Despite the institution's role in personnel selection, the appellant retained responsibility for maintaining cleanliness.

5. Conclusion and Judgment:
The Tribunal concluded that the appellant's services did not align with 'manpower recruitment and supply services' based on the agreement's terms and the nature of the cleaning arrangement. Consequently, the Tribunal found merit in the appellant's case for waiving the pre-deposit amounts and stayed the recovery pending appeal resolution.

6. Final Decision:
The Tribunal granted the appellant's application for waiver of pre-deposit and stayed the recovery of the adjudged amounts until the appeal's final disposal, ruling in favor of the appellant's interpretation of the services provided.

This detailed analysis encapsulates the key arguments, interpretations of the agreement clauses, and the Tribunal's decision regarding the service tax liability issue raised in the case.