2017 (10) TMI 442 - AT - Service Tax

Service provider liable for tax on security agency & manpower recruitment services, appeal dismissed.

The appellant, a service provider, was held liable for tax under sections 65(105)(w) and 65(105)(k) of the Finance Act, 1994 for providing 'security ... Levy of service tax - Business run by an Individual can be termed as held as 'commercial concern' - Security agency service - manpower recruitment or supply service - contention of the appellant is that for most of the relevant period the liability was limited to ‘commercial concern’ which the appellant claimed not to be - Held that: - It would appear that the appellant did bill and had been collecting service tax as applicable. There is, thus, no ground for them to claim that tax liability did not arise - The claim of the appellant that, as an individual operator, the expression ‘commercial concern’ would not apply to them is based on an imperfect understanding of the provisions. A ‘commercial concern’ is one which undertakes any activity with profit motive. The appellant cannot claim to be excluded from such coverage. Accordingly, the appellant is, and was always, liable to tax in the said categories from the very inception - appeal dismissed - decided against appellant. Issues:1. Liability of tax under sections 65(105)(w) and 65(105)(k) of Finance Act, 1994 for 'security agency service' and 'manpower recruitment or supply service'.2. Applicability of the extended period for demand when interpreting taxable service.3. Whether the appellant's claim of not being a 'commercial concern' is valid.4. Discharge of tax liability by the appellant.5. Collection of service tax by the appellant and its impact on tax liability.Analysis:1. The appellant, a service provider, was held liable for tax under sections 65(105)(w) and 65(105)(k) of Finance Act, 1994 for providing 'security agency service' and 'manpower recruitment or supply service' from February 2005 to December 2008.2. The appellant contended that the extended period for demand should not apply due to their alleged ignorance of the tax liability and interpretation of the taxable service. However, the tribunal found that the appellant had collected service tax from recipients, indicating awareness and compliance with tax obligations.3. The appellant argued that they were not a 'commercial concern' and hence not liable for tax. The tribunal rejected this claim, stating that a 'commercial concern' includes any entity operating with a profit motive, and the appellant could not be excluded from this definition.4. The appellant claimed to have discharged a portion of the tax liability and sought to set aside the demand. However, the tribunal found no merit in this argument as the appellant had collected service tax but failed to segregate it while billing recipients.5. The tribunal concluded that the appellant had indeed collected service tax and was liable for the tax under the specified categories. Therefore, the tribunal dismissed the appeal, emphasizing that the appellant's claims were not acceptable based on the evidence presented during the proceedings.