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of <h1>Tribunal dismisses service tax liability on cargo handling & manpower recruitment services, remands construction service issue for further examination.</h1> The Tribunal dismissed the service tax liability on cargo handling service and manpower recruitment service. The issue of service tax liability on ... Nonpayment of service tax - cargo handling service - manpower recruitment service - cleaning service - commercial & Industrial construction service - demand - Held that: - service tax liability cannot be confirmed against the appellant under cargo handling service - it is only after the commodity becomes a cargo, its loading and unloading at the freight terminal for being transported by any mode becomes a cargo handling service. Manpower recruitment service - Held that: - as the appellant never supplied any man power to be engaged by the contractee for executing the job by themselves. Hence, supply of labour by the appellant for undertaking the assigned task of cleaning will not fall within the ambit of taxable service of man power recruitment or supply agency service. Therefore, service tax demand cannot be sustained on the appellant. Works contract service - Held that: - Since the work involved both supply of goods and deployment of labour, the activities should fall within the purview of taxable service of works contract, which is leviable to service tax w.e. f. 01.06.2007 - In this case, since the period is 2005-06, which is prior to the effective date of levy of service tax on work contract service, no service tax is liable to be paid by the appellant for providing such service. However, in the present case, since the authorities below have not specifically discussed about the nature of activities undertaken by the appellant and whether there is any involvement of any material for execution of the assigned work, we are of the view that the matter should go back to the original authority for a fresh fact finding. Appeal allowed by of remand. Issues:1. Service tax liability on cargo handling service2. Service tax liability on manpower recruitment service3. Service tax liability on commercial or industrial construction serviceCargo 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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