2015 (9) TMI 1220 - AT - Service Tax

Service Tax Liability Appeal: Tribunal Upholds Decision on Manpower Recruitment Category

The Tribunal upheld the first appellate authority's decision in two appeals challenging the non-discharge of service tax liability under the 'Manpower ... Manpower Recruitment or Supply Agency service - Job work or contract labor - activity of cutting, drilling, punching, bending, notching of materials as the work orders within the factory of principal - Imposition of interest and penalties - Held that:- the department's case that the respondents were supplying labour seems to be incorrect as the first appellate authority scanned the bill raised by respondents which indicates that the charges which are paid to the respondents are in respect of lump sum job and various activities involved depending upon the quantum of material. It is also seen that the first appellate authority has recorded factual finding that M/s. Amitasha Enterprises P. Ltd. supplies the galvanised material to the respondent and further activity are carried out by the respondent within the factory premises of M/s. Amitasha Enterprises P. Ltd., and it is also undisputed that M/s. Amitasha Enterprises P. Ltd. was discharging the Central Excise duty on such goods. - respondent was correct in bringing to our knowledge the judgment of the Tribunal in M/s. Yogesh Fabricators [2015 (8) TMI 1013 - CESTAT MUMBAI] which is squarely covering the issue in their favour. - impugned orders are correct and legal and does not suffer from any infirmity - Decided against Revenue. Issues:Appeals against non-discharge of service tax liability under 'Manpower Recruitment or Supply Agency' service. Dispute regarding service provided to M/s. Amitasha Enterprises P. Ltd. Appeals disposed of by common order. Department argues respondents are suppliers of contract labor. Appellant cites precedent in M/s. Yogesh Fabricators case. First appellate authority's orders upheld.Analysis:The judgment addresses two appeals challenging the non-discharge of service tax liability under the 'Manpower Recruitment or Supply Agency' service category. The appeals were directed against Order-in-Appeals No. SR/306/NGP/2010 and SR/299/NGP/2010. Both appeals were disposed of through a common order due to the similarity of the dispute. The respondents were accused of not fulfilling their service tax obligations. The Adjudicating Authority upheld the demands, imposed penalties, and confirmed interest. However, the first appellate authority set aside these demands based on a precedent from the Tribunal. The appellants provided services to M/s. Amitasha Enterprises P. Ltd., involving specific work on a tonnage basis. The revenue, dissatisfied with the first appellate authority's decision, filed appeals in both matters.The Departmental Representative argued that the respondents were registered under the Contract Labour (Regulation and Abolition) Act, 1970, and were engaged in specific work for M/s. Amitasha Enterprises P. Ltd. The representative highlighted that the Tribunal's judgment in the case of Ritesh Enterprises did not prevent the department from appealing in the present case. The department sought to set aside the first appellate authority's order and reinstate the Adjudicating Authority's decision. On the other hand, the appellant's counsel referred to a similar case involving M/s. Yogesh Fabricators, where the Tribunal ruled in favor of the activity undertaken by M/s. Amitasha Enterprises P. Ltd.Upon reviewing the submissions and records, the Tribunal found in favor of the first appellate authority's decisions for various reasons. The department's claim that the respondents were supplying labor was deemed incorrect. The bills raised by the respondents indicated charges for lump sum jobs based on the quantity of material, not for labor supply. Additionally, the activities were carried out within M/s. Amitasha Enterprises P. Ltd.'s premises, where the central excise duty was being discharged. The Tribunal acknowledged the relevance of the precedent set in the M/s. Yogesh Fabricators case, which supported the respondents' position. Consequently, the Tribunal upheld the first appellate authority's orders, deeming them legally sound without any defects. The appeals were rejected, and the impugned orders were upheld.