Tribunal rejects service tax demand on manpower supply, upholds respondent's position

The Tribunal upheld the first appellate authority's decision, stating that the demand of service tax liability on the respondent under the category of 'manpower recruitment and supply agency services' was unfounded. The respondent provided services using their own skilled and unskilled manpower as per work orders received from M/S Exide Industries Ltd. The Tribunal found the demands raised were incorrect, except for some related to service tax collection. Revenue's appeal was dismissed, confirming the correctness of the first appellate authority's decision. The Tribunal's ruling was in line with established law and previous judgments.

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Issues:
Demand of service tax liability on the respondent under the category of 'manpower recruitment and supply agency services'.

Analysis:
The appeal was filed by Revenue against an order-in-appeal dated 14.11.2013 regarding the demand of service tax liability on the respondent under the category of 'manpower recruitment and supply agency services'. The respondent received purchase orders/work orders from M/S Exide Industries Ltd for specified work to be carried out on a lumpsum basis. The respondent deputed their employees to work under the directions and supervision of M/S Exide Industries Ltd. The first appellate authority found that the demands raised on the respondent were incorrect, as the work orders indicated that the respondents were providing services by engaging their own skilled and unskilled manpower. The first appellate authority confirmed some demands related to service tax collected but not deposited with the department, and Revenue's appeal was only in respect of the demands set aside by the first appellate authority. The Tribunal relied on previous decisions and held that the impugned order was correct and legal, without any infirmity.

In conclusion, the Tribunal upheld the first appellate authority's decision, stating that the impugned order was correct and legal. The issue revolved around the demand of service tax liability on the respondent under the category of 'manpower recruitment and supply agency services', based on the work orders received by the respondent from M/S Exide Industries Ltd. The Tribunal found that the respondents were providing services by engaging their own skilled and unskilled manpower, as per the work orders, and confirmed the decision of the first appellate authority. The Tribunal's decision was based on established law and previous judgments, including the case of Divya Enterprises v. CCF - 2010 (29) STR 370 (Tri. Bang.).

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