TaxTMI 
TaxTMI 
2018 (7) TMI 1532
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....ommissioner. 2. Heard both sides and perused the records. The issue in brief is that the respondent herein is a service provider to M/s ITC Limited who are the manufacturers of paper. The respondents were registered under "Business Auxiliary Services" as well as under "Manpower Supply Service" under the provision of service tax. It appeared to the department that the respondent were providing Business Auxiliary Services and were instead paying service tax under Manpower Supply service. The matter was investigated by the Anti Evasion wing of the Commissionerte and it was found that the respondent herein had two kinds of agreements with M/s ITC Limited for providing manpower. These are as detailed below: A) First Agreement: "ANNEXURE....
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....ve as per eligibility in April, 2005 at the following rates. (1) Unskilled labour Rs. 4.20/- per day (2) Semi skilled labour Rs. 5.32/- per day (3) Skilled Labour Rs. 6.43/- per day Wages to contract workmen: Unskilled Contract Labour rate / day w.e.f. 01/04/2003 is Rs. 111.43 This rate includes a) Basic Wage ) -85.40 b) Paid Holidays ) c) Medical ) d) PF ) -26.03 e) Bonus ) f) Cost of Safety shoes ) This rate does not include annual leave reimbursement. No separate bonus will be paid to the Service Provider. Bonus element is Considered while deciding rate/ton and Service Provider has to pay bonus As ....
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....tes do not include the annual leave payable for the workmen. The company will reimburse the annual leave as per the eligibility in April 2005, at the following rates. (1) Unskilled labour Rs. 4.20/- per day (2) Semi skilled labour Rs. 5.32/- per day (3) Skilled Labour Rs. 6.43/- per day In addition to the above, the service charges are paid to the service provider. Variousslabs of service charges are as below: No. of Contract Labour deployed/day Service charges (For month) 10 - 50 Rs.4500 51 - 100 Rs.6000 101 - 150 Rs.9000 151 & above Rs.12000 The average number of labour engaged by the service provider and the decision to fix him in appropriate slab of service charges will be o....
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....Service" as follows: "Business Auxiliary Service" means any service in relation to,- (i) Promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) Promotion or marketing of service provided by the client; or (iii) Any customer care service provided on behalf of the client; or (iv) Procurement of goods or services, which are inputs for the client; or (v) Production or processing of goods for, or on behalf of the client; or (vi) Provision of service on behalf of the client; or (vii) A service incidental or auxiliary to any activity specified in subclauses (i) to (vii), such as billing, issue or collection or recovery of cheques, p....
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....3 and therefore the adjudicating authority had accordingly made and confirmed the demand. d) Even on the grounds of time bar, their proceedings are not sustainable as the entire activity of the assessee is known to the department sine their registration in June 2005. e) The adjudicating authority has not reported the findings as to how the additional responsibility of supervision and quality of work of the manpower required to be assured under the agreement make man power supply service are classifiable as Business Auxiliary Service. 5. In the grounds of appeal, Revenue reiterated the aforesaid backgrounds and argued that the agreements entered into by the service provider with ITC show that one type of agreement provides for payme....
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....spondent classified them as manpower supply services and paid the service tax accordingly. The first type of agreement states that the scope of work under this contract includes handling of the "loose broke" generated due to physical damages and also due to start up wastage at the winder of PM-V and for this purpose the service provider shall depute its manpower approved by the company to undertake the jobs. The second type of contract says "to deploy unskilled casual labour for carrying out the below jobs". In both types of contract, the type of job to be carried out is specified, in the first case the rate of payment is in terms of Rupees per tonne whereas in the latter case, the payment is of Rupees per man days labour. Even in the first....