Extended limitation, welfare organisation liability, and educational-service exemption shape service tax treatment with duplicate penalties disallowed.

Non-filing of ST-3 returns and non-payment of service tax were treated as suppression of material facts, making the extended limitation period invocable. Manpower recruitment and supply agency service was held taxable even though the provider was a welfare or no-profit organisation, because the statutory definition covered service by any person and contained no exclusion for such entities. Services rendered to Kendriya Vidyalayas for security, cleaning and housekeeping were held covered by the relevant exemption, so the corresponding demand was set aside. Separate penalties on office bearers for the same omission were held unsustainable once penalty had been imposed on the society, though the society's penalty was maintained.

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Issues: (i) whether the demand of service tax was barred by limitation and whether the extended period could be invoked on account of suppression of facts; (ii) whether service tax was payable on manpower recruitment and supply agency services and whether the assessee's status as a welfare organisation exempted it from tax; (iii) whether the demand attributable to services rendered to Kendriya Vidyalayas was exempt and whether penalty could be imposed simultaneously on the society and its office bearers.

Issue (i): whether the demand of service tax was barred by limitation and whether the extended period could be invoked on account of suppression of facts.

Analysis: The assessee was registered under service tax but had not filed ST-3 returns and had not discharged the full tax liability. On that basis, the failure to disclose the taxable turnover and the non-payment of tax were treated as suppression of material facts. The Tribunal held that these facts established wilful concealment sufficient to justify invocation of the extended period.

Conclusion: The plea of limitation failed and the extended period was held invocable against the assessee.

Issue (ii): whether service tax was payable on manpower recruitment and supply agency services and whether the assessee's status as a welfare organisation exempted it from tax.

Analysis: The Tribunal noted that the taxable entry covered service provided by "any person" and that the statutory definition of manpower recruitment or supply agency service contained no exclusion for a welfare or no-profit organisation. The activity also did not fall within the negative list, and the assessee's charitable or welfare character was held irrelevant to the tax charge.

Conclusion: The liability to service tax on manpower recruitment and supply agency services was upheld against the assessee.

Issue (iii): whether the demand attributable to services rendered to Kendriya Vidyalayas was exempt and whether penalty could be imposed simultaneously on the society and its office bearers.

Analysis: Services provided to educational institutions by way of security, cleaning or housekeeping were covered by the exemption notified under the service tax exemption notification. The Tribunal therefore accepted the assessee's claim for the portion of demand relatable to services rendered to Kendriya Vidyalayas. On penalty, the Tribunal held that once penalty had been imposed on the society, separate penalties on the office bearers for the same omission were not sustainable.

Conclusion: The demand relating to services rendered to Kendriya Vidyalayas was set aside, and the penalties on the office bearers were held unsustainable, while the penalty on the society was maintained.

Final Conclusion: The service tax demand was substantially sustained, but relief was granted for the exempt educational-institution services and for the personal penalties imposed on the office bearers, resulting in only partial success for the appellants.

Ratio Decidendi: A taxable service defined to cover "any person" cannot be excluded merely because the provider is a welfare or no-profit entity, suppression of returns and non-payment can justify the extended limitation period, and a notified exemption for services to educational institutions must be given effect while duplicate penalties for the same omission are impermissible.

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