2015 (3) TMI 43 - AT - Service Tax

Tribunal reclassifies sugar cane company's service as 'Business Auxiliary Service'

Shriram Oos Tod Majoor Seva Sangh Versus Commissioner of Central Excise, Customs And Service Tax

Shriram Oos Tod Majoor Seva Sangh Versus Commissioner of Central Excise, Customs And Service Tax - 2015 (38) S.T.R. 1052 (Tri. - Mumbai) Issues:Classification of service under 'manpower recruitment or supply agency service' for harvesting and transportation of sugar cane. Bar on limitation for the period covered by the show cause notice.Analysis:Issue 1: Classification of service under 'manpower recruitment or supply agency service'The appellant, a private limited company facilitating harvesting and transportation of sugar cane, contested the service tax demand by arguing that their activity does not fall under 'manpower recruitment or supply agency service.' They highlighted agreements with farmers and the sugar factory, emphasizing that they act as facilitators and not labor suppliers. The appellant paid service tax under 'Business Auxiliary Service' for coordination services. The Revenue argued that the appellant supplied labor for sugar cane harvesting and transport, supporting the classification under 'manpower recruitment or supply agency service.' The Tribunal examined agreements and concluded that the appellant's role was that of a facilitator, coordinating between farmers and the sugar factory. Payments were made on a tonnage basis, not based on the number of laborers, indicating a service related to goods procurement, falling under 'Business Auxiliary Service.' The Tribunal set aside the order classifying the service under 'manpower recruitment or supply agency service,' ruling in favor of the appellant.Issue 2: Bar on limitation for the period covered by the show cause noticeThe appellant contended that a portion of the period covered by the show cause notice was barred by limitation due to the absence of suppression or withholding of information. However, the Tribunal did not delve into this issue as the primary focus was on the classification of services. Therefore, the Tribunal did not provide a specific ruling on the limitation aspect.In conclusion, the Tribunal allowed the appeal, setting aside the order classifying the service under 'manpower recruitment or supply agency service.' The detailed analysis of agreements and payment structures supported the finding that the appellant's role was that of a facilitator in the harvesting and transportation process, not a labor supplier. The issue of limitation was not extensively addressed in the judgment.