2016 (11) TMI 1002 - AT - Service Tax

Tribunal rules in favor of charitable trust in service tax liability case

Loknete Sarva Seva Sangh Versus Commissioner of Central Excise Pune-III

The Tribunal set aside the order-in-original, ruling in favor of the appellant, a charitable trust, in a service tax liability case related to 'manpower ... Service tax liability - manpower recruitment and supply agency service - Held that: - appellant is a charitable trust who is executing a contractual obligation to M/s Loknete Baburao Patil Sahakari Sakhar Karkhana Ltd., for carrying out the activities of harvesting and transportation of sugar cane on behalf of sugar cane producers and are paid consideration by the sugar factory. It is the finding of adjudicating authority that the payment received by appellant is taxable under the category of “manpower recruitment and supply agency services”. The issue is no more res integra as the Hon'ble High Court of Bombay in the cases CCE v. Shri Samarth Sevabhavi Trust & Ors. [2015 (3) TMI-1170 (Bom)] on identical set of facts upheld the order of the Tribunal that these kind of services are not covered under the category of “manpower recruitment and supply agency services”. Appeal allowed - decided in favor of appellant. Issues involved:Service tax liability on appellant under the category of 'manpower recruitment and supply agency service'Analysis:The appeal was directed against an order-in-original dated 21.05.2012. The issue revolved around the service tax liability on the appellant under the category of 'manpower recruitment and supply agency service.' The appellant, a charitable trust, was executing a contractual obligation for harvesting and transporting sugar cane on behalf of sugar cane producers. The adjudicating authority found the payment received by the appellant taxable under the said category. However, it was noted that similar cases had been addressed by the Hon'ble High Court of Bombay, where it was established that such services were not covered under 'manpower recruitment and supply agency services.' Citing judgments in cases like CCE v. Shri Samarth Sevabhavi Trust & Ors. and CCE v. Godavari Khore Cane Transport Co. (P) Ltd., the Tribunal concluded that the issue was settled by the jurisdictional High Court. Consequently, the impugned order was deemed unsustainable and set aside, allowing the appeal with consequential relief, if any.