2007 (2) TMI 661 - AT - Service Tax

Appellate Tribunal rules in favor of service provider exempting tax liability for supplying personnel

People’s Choice Versus Commissioner of Service Tax, Bangalore

The Appellate Tribunal CESTAT BANGALORE ruled in favor of the appellant, a service provider, determining that supplying personnel does not fall under the ... Dispensation of pre-deposit Issues involved: Determination of liability for service tax on supply of personnel under the category of 'Business Auxiliary Services' and consideration of time-bar for payment.In the judgment by Appellate Tribunal CESTAT BANGALORE, the appellant, a service provider offering security services and personnel like drivers, nurses, loaders, etc., contested the categorization of supplying employees under 'Business Auxiliary Services' for service tax liability. The appellant argued that providing personnel does not constitute promotion, marketing, or sale of goods as per the definition of 'Business Auxiliary Services.' They pre-deposited a partial amount and sought waiver for the remaining balance, citing that the department was aware of the services provided, making the claim time-barred. The appellant's counsel emphasized a strong case on merits for waiving the balance amount.Upon consideration, the Tribunal agreed with the appellant that supplying personnel does not align with the definition of 'Business Auxiliary Services' involving promotion or marketing activities, thus exempting &8377; 20 lakhs from pre-deposit. Regarding the remaining amount, the appellant's plea of being time-barred was acknowledged, as they were already under service tax coverage with all details disclosed to the department. Consequently, the Tribunal granted a waiver for the balance amount, allowing a stay on recovery until the appeal's disposal. The appeal was scheduled for hearing in due course.