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of <h1>Tribunal rules in favor of applicant: labor arrangement not 'Manpower Supply Service' under Finance Act.</h1> The Tribunal ruled in favor of the applicant, finding that the activity of arranging laborers for harvesting sugarcane did not constitute 'Manpower Supply ... Waiver of pre deposit - Manpower Supply Service - Payment of labour charges to farmers - organizing labourers making it available to the farmer for harvesting sugar cane - Held that:- In the absence of employer-employee relationship between the applicant and the labourers, prima facie, it appears that payment to the labourers is only routed through applicant and applicant is not receiving any consideration for services, if any, rendered. For levying service tax, it is necessary that services should be rendered and there should be consideration received for such services. Since adequate proof regarding consideration retained by the applicant is not brought on record, we consider it proper to grant waiver of pre-deposit of dues arising from the impugned order for admission of appeal following the earlier order given by this Tribunal. We also note that the order passed by the Bombay Bench of the Tribunal in the case of Samarth Sevabhavi Trust (2011 (4) TMI 918 - CESTAT, MUMBAI) was in a different set of facts. We note that applicant therein was not a sugar factory. The applicant therein was engaged in the business of organizing labourers making it available to the farmer for harvesting sugar cane and also in transportation of sugarcane to the sugar factory and they were receiving consideration for the services. Therefore, we feel that the order passed in that case is not applicable in the facts of the present case. - Stay granted. Issues:1. Whether the activity of providing laborers for harvesting sugarcane constitutes 'Manpower Supply Service' under the Finance Act, 1994.2. Whether the applicant is liable to pay service tax on the charges deducted and paid to the laborers.3. Whether the applicant is entitled to waiver of pre-deposit of dues for admission of appeal.Analysis:Issue 1:The Revenue contended that the applicant's activity of arranging laborers for harvesting sugarcane falls under the category of 'Manpower Supply Service' as per the relevant sections of the Finance Act, 1994. However, the applicant argued that they merely maintained a database of laborers and gang leaders, facilitating contact between farmers and laborers without retaining any payment. The Tribunal noted the absence of an employer-employee relationship between the applicant and the laborers, indicating that the applicant did not receive consideration for any services rendered. The Tribunal observed that for service tax to apply, services must be provided with consideration received. It distinguished a previous case involving a different entity engaged in organizing laborers and receiving payment for services, finding that case not directly applicable to the present situation.Issue 2:The applicant had been issued a show cause notice demanding service tax for the period in question, which was confirmed along with interest and penalty through an adjudication order. The applicant appealed against this order, seeking waiver of pre-deposit of dues. The Tribunal considered the arguments presented by both parties. The Revenue asserted that the applicant's activities related to supplying manpower were taxable, citing relevant legal provisions. The Tribunal, however, found that the applicant did not retain any consideration for the services provided, leading to the decision to grant waiver of pre-deposit of dues for admission of the appeal.Issue 3:The applicant sought waiver of pre-deposit of dues arising from the impugned order for admission of the appeal. The Tribunal, after analyzing the submissions from both sides, concluded that the applicant did not have an employer-employee relationship with the laborers and did not receive consideration for any services rendered. Therefore, the Tribunal granted the waiver of pre-deposit of dues and ordered a stay on the collection of such dues during the pendency of the appeal.In conclusion, the Tribunal granted the applicant's request for waiver of pre-deposit of dues for admission of the appeal, considering the specific circumstances of the case and the absence of evidence showing that the applicant received consideration for the services provided.
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