2023 (7) TMI 767

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....ion of works contract whether the service received by the Appellant from the sub-contractors is in the nature of Manpower Supply Service or Works Contract Service. 2. The Appellant is registered with the Department for providing various services viz., Construction Service, Commercial or Industrial Building and Civil Structure Service, Works Contract Service, Supply of Tangible Goods Service, Manpower Recruitment Agency Service, Transport of Goods by Road Service, etc. They have been registered since 25.04.2006. The Anti-Evasion officers of the Department, upon inspection of the records of the Appellant, observed that the Appellant has booked certain expenditure under the head 'Labour Charges' and 'Construction expenses' in the Profit & L....

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....r. 3. Being aggrieved, the Appellant is before this Tribunal, inter alia, on the grounds that the sub-contractors were awarded work packages there being no element of supply of manpower. From the copy of the Work Orders which are annexed and forming part of the OIO, description of work mentions (i) 'Piling Work', quantity - 200 @ Rs.49,000/- totalling Rs.98,00,000/-, (ii) 'Concrete Works', quantity - 6000 @ Rs.1700/- amounting to Rs.1,02,00,000/-, thus grand total of work being Rs.2,00,00,000/-. Learned Counsel pointed out that from the plain reading of the Work Order, there is no element of supply of any certain quantity of manpower, rather it is awarded construction work on rate basis. It is the sub-contractors outlook to employ the nu....

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....cussed under Para 5.4 above, as per the general terms & conditions of a Work Order, the works are to be executed by the sub-contractor on their own by engaging the skilled manpower apart from bringing the (i) tools (i.e., both Power & Hand tools) viz., knives, saws, hammers, shovels, rakes etc., used to form, shape, fasten, add to, take away from, or otherwise change something by cutting, hitting, digging, rubbing and (ii) tackles viz., Lifting tackles, gear/appliance, fiber/wire rope sling, chain slings, hooks, rings, sheaves (grooved pulleys), swivel, shackles & similar gears used in hoisting, lowering and handling the operations & the required machinery, wherein the Sub-Contractor only will exercise control & supervision over the workmen....

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.... Reverse Charge Mechanism, considering the expenses on account of construction & labour as liable to service tax, instead of the income generated/earned by virtue of provision of Services, However, in view of the ensuring legal matrix discussed in detail in preceding Paras, the demand is not sustainable on merits per se and liable to be dropped summarily." 4. On the basis of aforementioned findings recorded by the Principal Commissioner, he was pleased to drop the demand and recall the proceedings initiated vide the aforementioned SCN. Learned Commissioner categorically recorded finding, that the services in question are construction service and works contract service, as material is involved. 5. Learned Counsel relies on the findings....