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of <h1>Tribunal upholds tax liability for manpower supply services, applicants directed to make pre-deposits</h1> <h3>M/s. Raji Works and M/s. Saratha Works Versus CCE (ST), Madurai</h3> The Tribunal upheld the tax liability on manpower supply services provided by the applicants, considering them as commercial concerns for tax purposes. ... Stay application - Demand of service tax - Commercial or non commercial activity - Manpower supply service - Held that:- Applicants were working in the name and style of proprietorship concerns and not in the name and style of each individual and it is already decided by the Tribunal in the case of Anuradha Jain Vs. CCE, Bhopal [2008 (7) TMI 43 - CESTAT, NEW DELHI] and CCE, Jaipur Vs. R.S. Financial Services [2007 (10) TMI 392 - CESTAT, NEW DELHI] that a proprietorship concern is to be considered as commercial concern for the purpose of interpreting different clauses in Section 65(105) of the Finance Act, 1994 wherever the expression commercial concern was used during the relevant period - Prima facie case not in favour of assessee - Stay granted partly. Issues:1. Tax liability on manpower supply services provided by the applicants.2. Eligibility for exemption for small scale service providers.3. Interpretation of the term 'commercial concern' in relation to tax liability.Issue 1: Tax liability on manpower supply services provided by the applicantsThe case involved the supply of manpower services by the applicants to a company without paying service tax for a specific period. The Revenue argued that the services were taxable and issued show-cause notices, leading to an adjudication upholding the tax liability. The first appellate authority confirmed the tax amounts against the applicants along with interest and penalties. The applicants challenged this decision through appeals.Issue 2: Eligibility for exemption for small scale service providersThe counsel for the applicants contended that the tax liability for the manpower supply services commenced from a certain date and they were eligible for exemption as small scale service providers for the first year of rendering taxable services. This would significantly reduce their liabilities, which they had partially paid. The counsel requested a waiver of the balance dues for the admission of the appeal.Issue 3: Interpretation of the term 'commercial concern' in relation to tax liabilityThe Revenue argued that the applicants, operating as proprietorship concerns, should be considered as commercial concerns for tax purposes. They referred to previous Tribunal decisions to support this interpretation. After considering arguments from both sides, the Tribunal agreed with the Revenue's submission. The Tribunal directed the applicants to make pre-deposits, which would lead to the waiver of the balance dues for admission of the appeal and stay the collection during the appeal's pendency.In conclusion, the judgment addressed the tax liability on manpower supply services, the eligibility for exemption as small scale service providers, and the interpretation of the term 'commercial concern' for tax purposes. The Tribunal upheld the tax liability based on the Revenue's argument regarding the applicants' status as commercial concerns. The applicants were directed to make pre-deposits to proceed with their appeals, with the balance dues being waived upon compliance.
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