2013 (8) TMI 375 - AT - Service Tax

CESTAT Chennai: Pre-deposit for Appeal Allowed, Manpower Supply Services

The Appellate Tribunal CESTAT Chennai allowed the Revenue's application to change the cause title in the ST-5 Form. It determined that the services ... Classification of Service - Demand for short paid duty – Interest and Penalty – Services to SEZ - Whether the services were in the nature of ‘Manpower Supply’ u/s 65(68) or in the nature of ‘Information Technology Services’ u/s 65 (53a) –Revenue was of the view that the services were in the nature of manpower supply which had become taxable from 16.6.2005 itself – Held that:- Prima facie, the contracts involved were for supply of manpower rather than contracts for software development. As regards supply of services to SEZ. - Assesse had not placed on record the details of any software that they developed or any deliverables in respect of any contract - there was shortage of even man-hours, billing were deducted proportionately - the companies to whom the persons were deputed were themselves software developers – Services supplied to SEZ had not been supported by enough documentary evidence - it was a clear case of suppression – relying upon Diksha Technologies Pvt. Ltd. Vs. CCE, Bangalore [ 2010 (10) TMI 491 - CESTAT, BANGALORE]. Waiver of pre-deposit – 50 Lakhs were ordered to be submitted as pre-deposit – rest of the duty waived till the disposal – stay granted partly. Issues involved:1. Change of cause title in ST-5 Form2. Nature of services provided by the applicant - manpower supply or information technology services3. Taxability of services provided to SEZ units4. Limitation period for demand of service tax5. Pre-deposit of dues for appeal considerationAnalysis:Issue 1: Change of cause title in ST-5 FormThe Revenue filed a miscellaneous application seeking a change in the cause title to reflect the respondent as 'Commissioner of Service Tax Chennai' instead of 'Commissioner of LTU Chennai' in ST-5 Form. The Tribunal allowed the application considering the applicant's registration with the Commissioner of Service Tax Chennai. The change was permitted for all future proceedings, and the miscellaneous application was allowed.Issue 2: Nature of services provided by the applicantA dispute arose regarding whether the services provided by the applicant to software companies like M/s. TCS Ltd and M/s. Infosys Ltd constituted manpower supply or information technology services. The Department contended that the services were manpower supply, taxable from 16.6.2005, while the applicant argued they were software development services. The Tribunal, after examining the contract terms, opined that the contracts were for the supply of manpower. The applicant was directed to make a pre-deposit of Rs.50,00,000 for admission of the appeal.Issue 3: Taxability of services provided to SEZ unitsPart of the services rendered by the applicant to units in SEZ was claimed to be exempt under Notification No.4/2004-ST. The exemption was not granted by the Commissioner due to lack of clear evidence that the services were consumed in SEZ. The applicant argued that certificates from TCS/Infosys confirming utilization of their services in SEZ should be accepted. The Tribunal found the evidence supporting the supply to SEZ insufficient and ordered the pre-deposit for appeal admission.Issue 4: Limitation period for demand of service taxThe applicant contended that the demand was partly barred by limitation, particularly concerning a show-cause notice dated 10.10.2008. However, the Tribunal did not address this issue explicitly in the judgment.Issue 5: Pre-deposit of dues for appeal considerationThe Tribunal ordered the applicant to make a pre-deposit of Rs.50,00,000 for admission of the appeal. Upon such deposit, the pre-deposit of the remaining dues from the adjudication order was waived, and the collection of the balance dues stayed during the appeal's pendency. Compliance was required to be reported by a specified date.This comprehensive analysis summarizes the key points and decisions made in the legal judgment delivered by the Appellate Tribunal CESTAT Chennai.