CESTAT, BANGALORE BENCH
Indian Institute of Management
Commissioner of Service Tax, Bangalore
STAY ORDER NO. 873 OF 2012
APPLICATION NO. ST/STAY/969/2011
APPEAL NO. ST/1538/2011
MAY 17, 2012
P.G. Chacko, Judicial Member
This application filed by the appellant seeks waiver and stay in respect of service tax (including education cesses) of Rs. 92,37,339/- demanded from them under the head “Manpower Recruitment and Supply Agency Services” for the period from 1-5-2006 to 30-9-2009, interest thereon and the penalties imposed on the appellant under various provisions of the Finance Act, 1994. On a perusal of the records and hearing both sides, we note that the above demand is on “placement service charges and recruitment fees” collected by the appellant (IIM-Bangalore) from various companies who visited the campus to recruit successful students for employment. It is submitted that the entire function of facilitating such campus recruitments was carried out by a ‘Students Placement Committee’ headed by a professor of the institute and that the institute per se did not have any role in the process other than collecting the above charges and fees for incurring the various expenses associated with the campus interview and activities connected therewith. The learned counsel for the appellant has attempted to claim support from a Circular of C.B.E. & C. as also from a decision of this bench which was rendered in the present appellant’s own case [2011 (23) S.T.R. 132 (Tri. – Bang.)]. He has claimed prima facie case on merits by submitting that the activities in question cannot be brought within the ambit of the definition of “Manpower Recruitment or Supply Agency” as amended with effect from 1-5-2006. The learned counsel has also; contested the demand on the ground of limitation. Contextually, it is pointed out that the amount of service tax coming within the normal period of limitation is only around Rs. 16.3 lakh. It is submitted that, in any case, the rest of the demand is heavily time-barred.
2. We have heard the learned Additional Commissioner (AR) also who has opposed the present application, on the strength of the findings of the adjudicating authority.
3. After considering the submissions, we have not found prima facie case on merits for the appellant. Prima facie, the institute was facilitating campus recruitment of its students by various companies from year to year and collecting charges/fees from such companies as a consideration for the same. Prima facie, this transaction squarely fell within the ambit of the definition of “Manpower Recruitment or Supply Agency’ as amended w.e.f. 1-5-2006. The circular relied on by the learned counsel is of no relevance inasmuch as the question discussed therein was whether an activity which would fall within the scope of the above definition w.e.f. 1-5-2006 could also be held taxable prior to that date. The decision cited by the learned counsel is also prima facie inapplicable inasmuch as that was a decision touching the scope of “Manpower Recruitment [or Supply] Agency Service” prior to 1-5-2006. We are also not impressed with the plea of limitation. Nevertheless, we are inclined to give the benefit of doubt to the appellant as regards the plea of limitation.
4. In the above scenario, we direct the appellant to pre-deposit an amount of Rs. 16 lakhs within 6 weeks and report compliance to the Assistant Registrar on 16-8-2012. Assistant Registrar to report to the bench on 23-8-2012. Subject to compliance, there will be waiver of pre-deposit and stay of recovery in respect of the penalties imposed on the appellant and the balance amount of service tax and interest thereon.