Tribunal dismisses service tax liability on cargo handling & manpower recruitment services, remands construction service issue for further examination.

The Tribunal dismissed the service tax liability on cargo handling service and manpower recruitment service. The issue of service tax liability on commercial or industrial construction service was remanded back to the original authority for further examination based on the nature of activities undertaken by the appellant.

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Issues:
1. Service tax liability on cargo handling service
2. Service tax liability on manpower recruitment service
3. Service tax liability on commercial or industrial construction service

Cargo Handling Service:
The appellant did not pay service tax amounting to Rs. 7,98,391 on services provided to M/s. Hindustan Zinc Ltd. The appellant argued that the shifting of material within the plant premises does not constitute 'cargo handling service' as they did not act as a bailee over the goods handled. The Tribunal agreed, citing precedents and the Supreme Court's ruling that loading and unloading become cargo handling service only after the commodity becomes cargo. Therefore, the service tax liability on cargo handling service was dismissed.

Manpower Recruitment Service:
The appellant claimed exemption from service tax on the grounds that they supplied labor for executing works contracts, not for employment. Referring to CBEC FAQs, the appellant argued that no service tax is leviable. The Tribunal did not sustain the service tax demand on manpower recruitment service as the labor supplied by the appellant for cleaning activities did not fall under the taxable service of manpower recruitment or supply agency service.

Commercial or Industrial Construction Service:
Regarding construction of a shed over a transformer, the appellant contended that they used their own material and labor, qualifying for exemption under a specific notification. The Tribunal noted that the activity involved both supply of goods and labor, falling under works contract service. However, as the period was prior to the effective date of service tax on works contracts, no tax liability arose. The matter was remanded for further verification on the involvement of material and labor, in line with the Supreme Court's judgment. The service tax liability on commercial or industrial construction service was subject to reevaluation by the original authority.

In summary, the Tribunal dismissed the service tax liability on cargo handling service, manpower recruitment service, and remanded the issue of commercial or industrial construction service back to the original authority for further examination based on the nature of activities undertaken by the appellant.

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