2019 (4) TMI 589 - AT - Service Tax

Tribunal rules services not manpower recruitment, supports Appellants' position

The Tribunal ruled in favor of the Appellants, determining that the services provided for cutting and transporting sugarcane were not classified as ... Classification of services - Manpower recruitment and supply agency service or not - appellant is required to cut sugarcane and transport the same to Sugar Factory. The contract was for a lump sum payment of 1% of sales and not as per “man days” - Held that:- The contract entered into by the Appellants was for chopping and transportation of sugarcane and not to supply any manpower. This Bench in the case of Samarth Sevabhavi Trust [2013 (8) TMI 218 - CESTAT MUMBAI] has held that from the documents available on record we do not find any activity undertaken by the trust either for the recruitment of manpower or for supply of manpower to the sugar factory - the facts of the case are identical. Appeal allowed - decided in favor of appellant. Issues:Classification of services rendered by the appellant under manpower recruitment and supply agency service.Analysis:The case involved the Appellants providing services to a Sugar Factory for cutting sugarcane and transporting it. The Revenue sought to classify this activity under manpower recruitment and supply agency service. The Appellants contended that the services provided were for cutting sugarcane and transporting it to the factory, not for manpower supply. The invoices issued by the Appellants also indicated the quantity of sugarcane cut, supporting their argument. The Appellants relied on various case laws to support their position, emphasizing that the demand under manpower supply was unsustainable.The Tribunal examined the terms of the agreement between the parties, which clearly stated that the work involved cutting and transporting sugarcane as prescribed by the Sugar Factory. The agreement specified rates for the work, and bills were to be prepared and submitted for payment accordingly. The Tribunal found that the contract was for the specific task of chopping and transporting sugarcane, not for supplying manpower. Citing the case law referred to by the Appellants, the Tribunal concluded that the issue was settled and in favor of the Appellants.Referring to a previous judgment by the Bench in a similar case, the Tribunal highlighted that no activity related to manpower recruitment or supply was found in the trust's operations. The Tribunal found the facts of the present case to be identical to the referenced case, which had been affirmed by the High Court and followed in other instances. Consequently, the Tribunal determined that the issue was no longer open to debate.Ultimately, the Tribunal allowed the appeal, providing consequential relief and disposing of any miscellaneous applications. The decision was pronounced in court on 06/03/2019.