CARBORANDUM UNIVERSAL LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE two appeals relate to two different periods - October, 1998 to March, 2000 and April, 2000 to September, 2001. The related show -cause notices have been issued on 9 -5 -2001 and 28 -1 -2002. The issue involved in both the cases is the same and hence both the appeals are taken up together for hearing and disposal.

(2.) SHRI R. Raghavan, learned counsel appearing for the appellants states that demands of service tax amounting to Rs. 11,97,041 and Rs. 8,75,064 have been respectively confirmed for the two periods on the ground that the appellants have provided management consultancy services. He states that out of the said amounts Rs. 7,23,254 and Rs. 5,30,934 relate to deputation of staff in respect of which service tax is not payable for the relevant periods. For such activities, the appellants are paying service tax subsequently after 'manpower supply service' has been brought under the service tax net. In respect of the balance amount of Rs. 4,73,786.80 and Rs. 3,44,130, he states that the appellants have contested the demands as the activity undertaken by the appellants does not amount to 'management consultancy service'. However, he states that the appellants are agreeable to pay the tax demanded but pray for waiver of the penalties imposed. He argues that the related contracts were executed well before the levy of service tax on 'management consultancy service' and the appellants were under the bona fide belief that the activities undertaken by them do not attract levy of service tax under the management consultancy service. The period covered also relates to the initial period of levy and, hence, the appellants satisfy the condition Under Section 80 of the Finance Act, 1994 for waiver of penalties imposed.

(3.) AFTER hearing both sides and perusal of the case records, we find that amounts of Rs. 7,23,254 and Rs. 5,30,934 out of the total demand relate to deputation of staff by the appellants. The arguments advanced by the learned counsel that deputation of staff comes under 'manpower supply service' and not under 'management consultancy service' is acceptable. We also note that for such services the appellants are paying service tax under manpower supply service for the subsequent period after the same has been brought under tax net. Accordingly, we set aside the demands amounting to Rs. 7,23,254 and Rs. 5,30,934. As regards the balance amounts of Rs. 4,73,786.80 and Rs. 3,44,130, we take note of the fact that the appellants have expressed their willingness through their counsel to pay these amounts and hence we confirm the demands.