APPLICABILITY OF SERVICE TAX

[BAL KRISHAN GARG]

Dear All Members , I have a query regarding applicability of service tax . My Client Mr.A alonghwith his labour was doing Job Work on the Material supplied related to Mr.B in the factory premises of Mr.B on which Mr.B was clearing them after paying of EXCISE DUTY . Here Mr.B is not concerned with the labour or their attendance but he is concerned only with the pieces completed and found ok by his quality department and paid on piece rate basis to Mr.A after deducting TDS . I have already filed reply against SCN issued against Mr.A during November , 2009 . The case was recomended by the auditors of AGCR as they interpreate the work as ' Supply of Labour ' while no relationship between the labour and service receipient as employee-employer and Mr.A was responsible for completing the task on piece rate basis . Moreover Mr.B was the EXCISE PAYING assessee and cleared the goods after paying EXCISE DUTY .Invoice was raised only against ok pieces on piece rate basis and JOB WORK ONLY mentioned on the face of the invoice .It has also been clarified by Mr.B to the Concerned AC in his reply on cross examination . Now the personal hearing has been called by the AC . Whether the concern Official can ignore all the relevent facts of the case on the basis of interpratation drawn by the auditors only and they ignore all the documents given during proceedings before him ? Whether Mr.A has to go for fight up to Tribunal for the case for just bucause concerned AC etc.have not draw their attention to the documents furnished before him and do not want to give him clean chit due to his position ? Thanks to all BAL KRISHAN GARG

AI Summary

Service Tax Query: Job Work by Mr. A on Mr. B's Materials Not 'Supply of Labour,' Favorable Outcome Expected A query was raised regarding the applicability of service tax for a client, Mr. A, who performed job work with his labor on materials supplied by Mr. B within Mr. B's factory. Mr. B paid Mr. A on a piece rate basis after quality checks, deducting TDS, and cleared goods after paying excise duty. Auditors interpreted the work as 'Supply of Labour,' but no employer-employee relationship existed. A personal hearing was called, and concerns were raised about the official potentially ignoring relevant documents. A response suggested that Mr. A has a strong case and should expect a favorable outcome.