2026 (5) TMI 1025

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....enue was allowed. By the impugned order, it has been held that the appellant is liable to discharge service tax on the fees collected from students towards placement activities, classifying the same under "Manpower Recruitment or Supply Agency Service" as defined under Section 65(105)(k) of the Finance Act, 1994. 2. The dispute pertains to the period 2006-07 to 2007-08. A show cause notice dated 28.08.2009 was issued to the Appellant proposing demand of service tax amounting to Rs.5,33,539/- under the category of Manpower Recruitment or Supply Agency Service, along with applicable interest and penalties. 3. The Adjudicating Authority dropped the demand, inter alia, relying upon the decision of the Tribunal in Motilal Nehru Institute o....

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....th Circular No. 96/7/2007-ST dated 23.08.2007? 6. The statutory definition of "taxable service" under Section 65(105)(k) contemplates a service provided to a client, namely an employer or prospective employer, in relation to recruitment or supply of manpower. The charging provision, therefore, inherently requires a service provider-client relationship where the consideration flowing from such client (i.e. the employer). In the present case, it is undisputed that the appellant collects placement-related fees from students and no consideration is received from recruiting companies. The appellant merely facilitates interaction between students and prospective employers without undertaking recruitment on behalf of such employers. 7. Ident....

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.... taxable service, it is clear that what is taxable is the rendition of any service towards recruitment or supply or manpower, temporarily or otherwise, to a client. The recipient of this service is a client who receives services in the nature of recruitment of supply of manpower, temporarily or otherwise. The recipient client must thus be an employer or prospective employer and the consideration for this service must flow from such employer to the provider of the service. The placement facilitation provided by educational institutions whereunder the placement charges are collected from students and not from an employer or a prospective employer, do not on a fair and reasonable interpretation of the taxable service as defined in the Act, fal....