CESTAT sets aside Demand of Service Tax on both Manpower Recruitment and Supply Service and Renting Immovable property

The Hyderabad bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has dismissed the service tax demands on M/s Bagga Distilleries Hyderabad Pvt Ltd for both manpower recruitment and supply service and renting immovable property. Bagga Distilleries, involved in manufacturing Indian Made Foreign Liquor (IMFL), was wrongly assessed for service tax under 'Manpower Recruitment and Supply Service' due to a misinterpretation of their manufacturing agreement with CML. The tribunal found no merit in this assessment. Additionally, the demand for tax on renting immovable property for 2008-2009 was deemed invalid, as the period was marked by legal disputes and retrospective amendments, leading to confusion about the tax levy. The demand, issued after the limitation period had expired, was thus time-barred. Consequently, CESTAT set aside the tax demands and penalties related to both services.