Whether courses conducted for ensuring jobs be leviable to service tax under Manpower Recruitment?

PJ/Case Law/2012-13/2041

Case:-ALCHEMIST HR SERVICES (P) LTD.VERSUS COMMR. OF CUS. & C.EX., HYDERABAD

Citation:-2013(32) S.T.R. 229 (Tri.-Bang.)

Brief Facts:-The appellant enrolls students who have completed courses conducted by Institution of Chartered Financial Analysts of India (ICFAI) and its affiliates under the “ Alchemist Special Placement Scheme”. After the course is completed, the students are assured of employment with various companies/ firms with a minimum remuneration of Rs. 20,000/- per month. Towards this service, the appellants are collecting fee of Rs. 3300/- per student. These amounts are collected in advance. The Commissioner has treated the amounts so collected as towards rendering of 'Manpower Recruitment Services' and accordingly confirmed demand of Service Tax of Rs. 66,41,053/- relating to the period 2005-06, 2006-07 and 2007-08 in pursuance of show cause notice dated 21-5-2009. He has also demanded interest and imposed penalties.

Appellant Contentions:-Learned advocate for the appellant, referring to the definition of 'Manpower Recruitment or Supply Agency Service', submits that the services rendered by them to the various students cannot be treated as services of 'Manpower Recruitment or Supply Agency Services' "to a client".

Respondent Contentions:-Learned advocate also relies on the Stay Order of the Tribunal in the case of Motilal Nehru National Institute of Tech. v. CCE, Allahabad reported in [2011 (22) S.T.R. 565 (Tri.-Del.)].
Reasoning of Judgment:-We have carefully considered the submissions from both sides and perused the records. To attract Service Tax under the category of 'Manpower Recruitment or Supply Agency', the services should be rendered to a client. Prima facie, we are in agreement with the submissions of the learned advocate that these students cannot be treated as clients to whom services of recruitment and supply is being rendered. In view of the above, there shall be waiver of pre-deposit of dues as per the impugned order and stay of recovery thereof till the disposal of the appeal.

Decision:-Stay granted.

Comment:-The crux of this case is that providing services of courses and training that ensures job cannot be covered by the category of “Manpower Recruitment or Supply Agency services” because such services are provided to students and not to clients who need manpower. As such, service tax demand was raised under the wrong category of service. Consequently, stay application was allowed.

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PJ/Case Law/2012-13/2041

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