ORDER
Jyoti Balasundaram, Vice President
1. We have heard both sides on the application for waiver of pre-deposit of service tax amount of Rs. 3,44,025/- covering the period from March, 2003 to July, 2006 and penalty of Rs. 25,000/-.
Service tax has been levied upon the applicants herein on the ground that they were providing services of manpower recruitment agency to M/s. Bajaj Organics Limited.
2. It has been verified and found that the staff of the applicant herein was loaned to M/s. Bajaj Organics Limited for carrying on its manufacturing / production activities. Until 16/06/2005 the definition of “manpower recruitment agency” was “any commercial concern engaged in providing any services, directly or indirectly, in any manner for recruitment of manpower, to a client.” Prima facie, the supply of manpower by the applicant to M/s. Bajaj Organics Limited will not amount to ‘recruitment of manpower’. However, w.e.f. 16/06/2005 service tax was leviable on “manpower recruitment or supply agency” which means “any commercial concern engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to a client.” Therefore, prima facie, it would appear that after 16/06/2005, the loaning of staff by the applicant to M/s. Bajaj Organics Limited would come within the definition of “manpower recruitment or supply agency”. However, we find that by an order dated December 11/12/2006 the Commissioner (Appeals) has given a categorical finding that if it is found on verification that the employees working on the rolls of the applicant have been diverted to undertake manufacturing activities of M/s Bajaj Organic Chemicals Limited then the applicant has not rendered any services relating to Manpower recruitment as per Section 65(68) of the Finance Act, 1994. On verification it has been so found. No appeal has been filed by the Revenue against this order of the Commissioner (Appeals) order dated 11/12/2006.
3. In this view of the matter, prima facie, case for waiver has been made out by the applicant, and, therefore, we waive pre-deposit of the service tax amount levied and penalty imposed and stay recovery thereof pending the appeal.
(Dictated in Court)