Tax appeal outcomes: BAS appeal dismissed, Man Power Recruitment Agency appeal successful.

The department's appeal regarding tax liability for Business Auxiliary Service (BAS) was dismissed by the Appellate Tribunal CESTAT CHENNAI, upholding the lower authority's decision. On the other hand, the assessee's appeal concerning tax liability for Man Power Recruitment Agency Service was successful, with the Tribunal setting aside the tax liability and penalty imposed. Consequential relief was granted as per law, and the cross objection filed by the assessee was disposed of.

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Issues:
1. Tax liability of Rs. 13,41,757/- for Business Auxiliary Service (BAS) from 10.09.2004 to 28.08.2006.
2. Tax liability of Rs. 10,254/- for Man Power Recruitment Agency Service from 16.06.2005 to 28.02.2006.

Analysis:

Issue 1: Tax liability for BAS
The Commissioner (Appeals) set aside the demand of service tax, interest, and penalty for BAS. The department appealed this decision. The lower appellate authority concluded that the activity undertaken by the assessee amounts to "manufacture" under Section 2(f) of the Central Excise Act, 1994. The Tribunal found no fault with this conclusion, stating that the demand set aside by the lower authority is sustainable. Therefore, the department's appeal against the decision was dismissed.

Issue 2: Tax liability for Man Power Recruitment Agency Service
The Commissioner (Appeals) upheld the demand for Man Power Recruitment Agency Service. The assessee appealed this decision. The Tribunal noted that the assessee employed its own labor for packing goods received from the principal manufacturer. There was a lack of clarity in the show-cause notice regarding the terms of supply of manpower. The Tribunal found that tax cannot be levied on the assessee for utilizing its own labor. Consequently, the tax liability and penalty imposed on the assessee were set aside. The assessee's appeal was successful.

In conclusion, the department's appeal was dismissed, and the assessee's appeal was allowed. Any consequential relief was granted as per law. The cross objection filed by the assessee was also disposed of.

This detailed analysis covers the issues of tax liability for BAS and Man Power Recruitment Agency Service as addressed in the judgment by the Appellate Tribunal CESTAT CHENNAI.

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