Tribunal denies full waiver of service tax demand for man power recruitment services.

The Tribunal denied the applicant's request for a complete waiver of pre-deposit of service tax demand related to man power recruitment services. It was found that the applicant did not supply man power to the company as claimed, and the agreement between the parties was not produced during the relevant time. The Tribunal directed the applicant to make a pre-deposit of 25% of the service tax demand within eight weeks, with the remaining demand, interest, and penalty waived during the appeal process.

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Issues involved:
Seeking waiver of pre-deposit of service tax demand under the category of man power recruitment and supply agency service for the period 2007-08 to 2009-10.

Analysis:
The appellant provided man power service to a company and paid service tax on the commission received at a certain rate. The Revenue contended that the appellant was liable to pay service tax on the man power service provided. A show cause notice was issued invoking the extended period of limitation. After adjudication, a demand for service tax, interest, and penalties was imposed. The applicant sought a waiver of pre-deposit of the service tax demand.

The consultant for the applicant argued that the wages paid by the company were reimbursed to the workers and should not be included in the assessable value of services as per section 67 of the Finance Act, 1994. Therefore, they claimed they were not liable to pay service tax.

Upon reviewing the agreement between the parties, the Tribunal found that the work assigned to the applicant involved verifying certain tasks, for which workers were employed. It was noted that the applicant did not supply man power to the company. Consequently, the Tribunal held that the applicant had not made a case for a complete waiver of pre-deposit. The Tribunal also observed that the agreement was not produced before the authority during the relevant time, justifying the invocable extended period. The Tribunal directed the applicant to make a pre-deposit of 25% of the service tax demand within eight weeks, with the balance demand, interest, and penalty waived during the appeal's pendency.

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