2023 (4) TMI 547 - AT - Service Tax

CESTAT rules unloading, transporting coal services not 'manpower recruitment'; Service Tax demand dismissed, relief granted.

Shri S. Selvam Versus Commissioner of Central Excise and Service Tax, Tiruchirappalli

Shri S. Selvam Versus Commissioner of Central Excise and Service Tax, Tiruchirappalli - 2023 (73) G. S. T. L. 363 (Tri. - Chennai) Issues involved:The main issue in this case is whether the services provided by the appellant are classifiable under manpower recruitment or supply agency service.Summary:Issue 1: Classification of services under manpower recruitment or supply agency serviceThe appellant was engaged for unloading, transportation, and stacking of coal, and was paid based on the quantity of coal handled. The documents indicated that there was no agreement for the supply of manpower to the service recipient. The work awarded to the appellant was related to handling and transportation of coal, not recruitment or supply of labor. The Tribunal held that the services provided did not fall under the category of 'manpower recruitment or supply agency' service. The appeal was allowed on merits, and the impugned order was set aside.In this judgment by the Appellate Tribunal CESTAT CHENNAI, the appellant, a lorry transporting and civil contractor, was engaged by a cooperative labor contract society for unloading coal from railway wagons and its transportation to the coal yard. The issue arose when a Show Cause Notice was issued proposing a demand of Service Tax under 'manpower recruitment or supply agency' service. The Order-in-Original confirmed the demand, and the lower appellate authority upheld it. The appellant contended that the services provided were more appropriately classifiable under 'goods transport agency' services. The appellant also argued against the invocation of the extended period for demand of Service Tax, citing a decision by the Principal Bench of the CESTAT at New Delhi. The appellant further sought waiver of penalties under Section 80 of the Act, stating no suppression of facts. The appellant's advocate referred to legal provisions and previous tribunal decisions to support their case.The Revenue argued that the services provided by the appellant involved the supply of sufficient manpower for unloading and shifting coal, making it fall under 'manpower recruitment or supply agency' service. They contended that since no consignment note was issued by the appellant, the service could not be considered as 'goods transport agency' service. The Tribunal examined the definitions and scope of 'manpower recruitment or supply agency' service under the Finance Act, 1994. It noted that the appellant was paid based on the quantity of coal handled, and there was no agreement for the supply of manpower. The Tribunal found that the services provided were related to handling and transportation of coal, not recruitment or supply of labor. Citing a previous decision by CESTAT Bangalore, the Tribunal held that the services did not fall under 'manpower recruitment or supply agency' service.In conclusion, the Tribunal allowed the appeal on merits, setting aside the impugned order. The services provided by the appellant were not classified under 'manpower recruitment or supply agency' service. Therefore, there was no need to discuss the invocability of the extended period or the justification for penalties. The appeal was allowed with consequential relief, if any, as per the law.