2019 (10) TMI 1245

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ided by M/s Nirma. The case of the department is that the appellant provided manpower for manufacturing of detergent powder/cake to M/s Nirma in its factory at Bhavnagar. Accordingly, the consideration received against the supply of manpower is leviable to service tax under the head of "Manpower Recruitment and Supply Agency Services". The revenue has issued a show cause notice periodically for payment of service tax. The adjudicating authority holding that the activity of the appellant is providing the services of "Manpower Recruitment and Supply Agency Services" confirmed demand of service tax amounting to Rs. 1,40,22,985 by adjudicating nine show cause notices. The demand of interest under section 75 of the Finance Act 1994, was made and penalty under section 76 and 78 was also imposed. Being aggrieved by the order in original dated 8/3/2011 the appellant filed the present appeal. 2. Shri. P.M. Dave, Ld. Counsel with Shri. Shailesh Trivedi, Advocate appearing on behalf of the appellant submits that the appellant have carried out activity of manufacturing of detergent cake/powder. The consideration towards the manufacturing received on the basis of the quantity i.e. per kg bas....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....  Copy of Hon'ble CESTAT, Ahmedabad order No. A/10297/2015 dated 20.03.2015 in Case of M/s. Motif India Infotech P. Ltd.  K. Damodarareddy V/s. Commr. Of C.Ex. Tirupathi-2010(19) STR 593 (Tri. - Bang.)  Hemant V. Deshmukh V/s. Commr. Of Ex., Goa- 2014(35) STR 602 (Tri. - Mumbai)  Ritesh Enterprise V/s. Commr. C.Ex. Bangalore-2010(18) STR 17 (Tri.- Bang.)  Divya Enterprises V/s. Commr C.Ex., Mangalore-2010 (19) STR 370 (Tri.- Bang.) 3. He also submits that in the appellant's own case on the same issue, the Additional Commissioner of the Central Excise and Service Tax, Bhavnagar dropped the proceedings vide order in original number BHVEXCUS- 000-ADC-036 to 038-14-15 dated 23/1/2015 the said order of the additional commissioner (AR) accepted by the department. 4. On the other hand Shri. L. Patra, Ld. Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He also handed over a written submission which was taken on record He submits that though there is an agreement for manufacture of synthetic detergent out of raw-material and packing material but the fact ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....aised under wrong head i.e. Man Power Recruitment and Supply Agency Service, for this reason also the demand is not sustainable. This tribunal time and again held that if contract is for particular job and not for man power supply the demand of service tax under Man Power Recruitment And Supply Service cannot be raised, the relevant judgments are referred below:-  Rameshchandra C. Patel-2012 (25) STR 471(Tri.-Ahmd.) "4. From the above it can be seen that there are two requirements for determining whether a service is taxable service under the category of manpower recruitment or supply agency. First of all, it should be provided by a manpower recruitment or supply agency and secondly it should be in relation to manpower supply or recruitment. In this case, whether it is in the agreement entered into between the two parties or in the activity undertaken by the appellant which is contract manufacturing, looked into, it is seen that nowhere the question of supply of manpower or recruitment arises. In fact the agreement is totally silent as regards the manpower. It does not have any provision relating to the number of men or labour to be used or the manner in whic....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the other as service by appellant (earlier known as PMSL) to JLSL. While considering this issue another issue that arises is whether there can be two manufacturers for the same goods. In the instant case JLSL claimed to be the manufacturer and the claim was accepted by Central Excise Department and JLSL was paying excise duty. In such circumstances is there any scope for PMSL to claim that their activity should also be considered as manufacturing activity in respect of the same goods? 15. We have perused the contract dated 1-4-2007 between the two parties. It is seen that as per the contract JLSL was supplying all the raw materials required for manufacturing final products. JLSL was also supervising the manufacturing process and was taking steps to ensure the quality of the products. All activities like handling the raw materials, its accounting and processing was done by appellant (earlier known as PMSL). This means that both the parties were involved in the manufacturing activity. It is also to be noted that such manufacturing arrangements are very common in the country. In such situation legal provisions exist in Central Excise laws for considering either of the two pa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ling to pay excise duty at the time of clearance of the goods from the factory of manufacture there was no need to adopt the procedure laid down in Notification 214/86-C.E. 18. We find that the predominant activities for manufacture were done by appellant (earlier known as PMSL). Their plant and machinery was used and their employees were doing the processes. In the matter of deciding who is the manufacturer of excisable products, ownership of raw materials is not a critical criterion. We do not see any merit in the argument of Revenue that the activities of making available the factory and infrastructure and doing activities of raw material handling, accounting etc. are to be considered as activities distinct from manufacturing activity. All the activities done by the appellants have to be seen together and when it is so seen it is clear that they were doing manufacturing activity. For reasons already explained, the fact that PLSL was paying excise duty does not lead to a legal position that the appellant (earlier known as PMSL) was not doing manufacturing activity. The fact that appellant (earlier known as PMSL) was charging two components towards job-charges separated a....