2023 (11) TMI 102 - AT - Service Tax

Brass article manufacturing assistance ruled not manpower recruitment services under specific work contracts at fixed rates

The CESTAT Ahmedabad ruled in favor of the appellant, holding that their activity of helping manufacture brass articles did not constitute manpower ... Classification of Services - Manpower Recruitment or Supply Agency service or not - activity undertaken by the appellant was primarily for helping in manufacturing of various types of brass articles which were further cleared on payment of Central Excise duty by M/s. Rajhans Metal Pvt. Limited. - HELD THAT:- The appellant have not supplied any manpower to the client as per the contract the same are basically for execution of a particular work as per the work contract at a per Kg/ MT rate fixed for the work - it is found that the matter under consideration is no more res-integra as it has already been decided by this Tribunal in the case of ABBAS MUSSA PROPERITOR VERSUS C.C.E. & S.T. -RAJKOT [2023 (8) TMI 249 - CESTAT AHMEDABAD] where it was held that the appellant have not provided the ‘Manpower Recruitment or Supply Agency Services’. The work undertaken by the appellant do not fall under the service category of Manpower Recruitment or Supply Agency Service and therefore, the impugned orders are without any merit and are set aside - appeal allowed. Issues Involved:1. Classification of services provided by the appellants.2. Liability of service tax under the category of Manpower Recruitment or Supply Agency service.3. Applicability of previous tribunal decisions on similar issues.Summary:1. Classification of Services Provided by the Appellants:The appellants were engaged by M/s. Rajhans Metals Pvt. Limited for activities such as loading, unloading, sorting, breaking, cutting, casting of brass scrap, and processing and packing of brass rods/sections. These activities were performed under a job-work contract where the appellants employed skilled and unskilled laborers. The appellants argued that the laborers remained their employees, and they complied with all statutory requirements, including labor laws, ESI Act, and PF Act.2. Liability of Service Tax under Manpower Recruitment or Supply Agency Service:The department contended that the appellants provided Manpower Recruitment or Supply Agency services and should have discharged service tax liability. However, the appellants maintained that their activities were part of a work contract based on the quantity of metal handled, and not the supply of manpower. The contract specified that the laborers were the appellants' employees, and the company had no responsibility for them.3. Applicability of Previous Tribunal Decisions:The tribunal referenced several previous decisions, including Abbas Mussa Properitor vs. CCE & ST, Rajkot and Sureel Enterprises Pvt. Limited, where it was held that similar activities amounted to manufacturing and not Manpower Recruitment or Supply Agency service. The tribunal found that the appellants' case was no different from these precedents. The contracts indicated that the appellants were engaged in job work rather than providing manpower services.Conclusion:The tribunal concluded that the work undertaken by the appellants did not fall under the service category of Manpower Recruitment or Supply Agency Service. Consequently, the impugned orders were set aside, and the appeals were allowed. The decision was pronounced in the open court on 31.10.2023.