Manpower supply versus manpower recruitment agency services led to unconditional stay and waiver of pre-deposit on a strong prima facie case.

Supply of manpower for a specified duration was treated as materially distinct from manpower recruitment agency services as understood before 16-06-2005, and the appellants relied on the Board circular explaining the pre- and post-16-06-2005 scope of the levy. On that basis, the Tribunal found that a strong prima facie case existed against the service tax demand. Unconditional stay was therefore granted and pre-deposit of the dues was waived pending disposal of the appeals.

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Issues: Whether the appellants, who were supplying manpower to clients, had made out a prima facie case for grant of stay and waiver of pre-deposit in relation to the service tax demand under manpower recruitment agency services.

Analysis: The order records the appellants' contention that, prior to 16-06-2005, the levy was confined to manpower recruitment agencies and that their activity was only supply of manpower for specified duration. Reliance was placed on the Board circular explaining the pre- and post-16-06-2005 scope of the service. On that basis, the Tribunal found that a strong prima facie case had been made out.

Outcome: Unconditional stay was granted and pre-deposit of the dues was waived pending disposal of the appeals.

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