By TIOL News Service

NEW DELHI, SEPT 26, 2014: A Service Tax demand of nearly Rs.24 crores has been confirmed by the CCE, Noida against the appellant on various counts.

The appellant is before the CESTAT seeking a stay against recovery of the adjudged dues.

The breakup of the demand under various heads and the findings of the Tribunal are as below –

++ Rs.35,82,676/- confirmed on the ground that there was difference between the figures given in their ST-3 returns and their balance sheet for the relevant period.

Held: Rs.30,21,221/- pertains to the services rendered to the Special Economic Zone units – in view of decision in Reliance Ports & Terminals Ltd. Vs. CCE 2013-TIOL-1473-CESTAT-AHM no service tax is payable on services provided to SEZ units. As regards remaining amount of Rs.5,61,455/-, no classification given for demanding this service tax. P rima facie , the appellants have made out a good case for staying the recovery of this component of demand.

++ Rs.3,30,011/- confirmed on the ground that International Financial Corporation is not notified as international agency to which rendering of service is exempt from service tax.

Held: IFC is not listed in the list of International bodies eligible for the exemption. P rima facie there is no case made out for staying the recovery of this component.

++ Rs.23,44,07,478/- has been confirmed on the ground that the payments received under the Swarnjayanti Gram SwarojgarYogna (SGSY) was in respect of providing Manpower Supply Service.

Held: The specific project for skill development for rural youth under SGSY was designed to equip the unemployed rural youths from the BPL category with employable skills, which would enable them to either secure a job/placement in the industry or pursue sustainable self-employment opportunities. It is evident that the aim of the said skill development programme is training, skill development and capacity building of the rural poor to enhance their employability or capacity for self-employment. It is similar to what the Govt. run Industrial Training Institutes (ITIs) do. Looking at the definition of Manpower Recruitment Supply or Agency, prima facie appellants cannot fall thereunder and consequently they cannot be held to have provided manpower recruitment and supply service. P rima facie, the appellants have made out a good case.

++ Rs.71,734/- is confirmed on account of payment made in foreign exchange to the foreign service providers.

Held: Paltry sum, Appellants are not contesting the same.

Conclusion: Pre-deposit ordered of Rs.4,01,745/- along with proportionate interest within four weeks for obtaining stay.

(See 2014-TIOL-1858-CESTAT-DEL)