Tribunal rules service tax should not be charged on salary and wages, only on service charges.

The tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellant. It held that service tax should only be charged on service charges, not on salary and wages, following the precedent set in the Gujarat Intelligence Security case. The tribunal ruled that if salary and wages are distinct from service charges, they do not form part of the gross amount charged, and service tax should not be imposed on them. The extended period of limitation was deemed inapplicable as the appellant regularly filed returns and all material facts were available on record.

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Issues:
- Interpretation of legal provision regarding liability for payment of service tax on commission/service charges or on the total amount received including salary and wages.
- Applicability of service tax on the total amount received by the appellant.
- Whether the appellant is liable to pay service tax on salary and wages disbursed by the service recipient.

Analysis:
1. Interpretation of Legal Provision: The appellant argued that they provided lump-sum work not covered under manpower supply services, and the manpower worked under their supervision, citing relevant circulars and tribunal orders. The consultant contended that service tax should be charged only on commission/service charges, not on salary and wages. They referenced tribunal orders like Gujarat Intelligence Security case to support their argument.

2. Applicability of Service Tax: The appellant contended that service tax should not be charged on the total amount received, as they showed service charges and salary/wages separately in bills. The tribunal noted that if salary/wages are separate and not part of the gross amount charged, service tax cannot be levied on them. The tribunal referred to Gujarat Intelligence Security case to support this view.

3. Liability for Service Tax on Salary and Wages: The appellant argued that they should not be liable for service tax on salary and wages disbursed by the service recipient. The tribunal agreed, stating that if salary/wages are distinct from service charges, they do not form part of the gross amount charged, and service tax should not be imposed on them. The tribunal also highlighted that the extended period of limitation was not applicable as the appellant regularly filed returns and all material facts were available on record.

4. Decision: After considering arguments and records, the tribunal set aside the impugned order on merits and limitation grounds. The appeal was allowed, providing consequential relief to the appellant. The tribunal emphasized that service tax should be charged only on service charges, not on salary and wages, following the precedent set in the Gujarat Intelligence Security case.

This detailed analysis of the judgment covers the issues raised, arguments presented, relevant legal provisions, and the tribunal's decision, providing a comprehensive understanding of the case.

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