2025-VIL-1984-CESTAT-HYD-ST
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SERVICE TAX CESTAT Cases

Service Tax – Providing of services – Demand of tax – Appellant is a Public Sector Undertaking engaged in carrying out certain construction works and other related activities in steel plant, power plant, railways, etc. – Department issued show cause notice to Appellant by proposing demand of Service Tax under various categories – Adjudicating Authority confirmed demands as proposed in show cause notice – Whether demand confirmed against Appellant under category of Cargo Handling Service (CHS) is sustainable – HELD – What is essential for this service is that service provided should be relating to or in relation to cargo handling by a cargo handling agency and said service should be integrally or inseparably connected with handling of cargo without being mere activity of transportation of such cargo. Perusal of agreement does not support view of department that Appellant was a cargo handling agency and on contrary, they were essentially engaged in handling certain materials including transportation thereof within premises of plant itself using their own heavy equipments. Activity carried out by Appellant inside plant was not considered as falling under category of CHS. Demand will not sustain under category of CHS – Appeal partly allowed - Repair service – Tax liability – Whether Adjudicating authority is justified in confirming demand raised under category of Management, Maintenance or Repair service – HELD – From perusal of scope of contract itself, it was very much in nature of maintenance and repair contract. Nature of activities performed by Appellant was akin to maintenance or repair. It was not necessary that Appellant had to undertake both activities of maintenance as well as repairs and if they had either maintained or repaired or both, they will still be covered within scope of service. There is no infirmity in order of adjudicating authority to this extent - Manpower recruitment service – Demand of tax – Whether demand confirmed under category of Manpower Recruitment or Supply Agency service (MRSAS) is sustainable – HELD – Adjudicating authority had examined three contracts while confirming demand raised under this head. MRSAS was brought under tax net w.e.f. 16-6-2005. In view of contracts, services were provided prior to introduction of this levy. Merely because bills were raised later on for this service and payments were received later on, demand cannot be made in respect of three contracts under category of MRSAS. Therefore, to that extent, order of adjudicating authority is liable to be set aside.
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