2023 (8) TMI 1146

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....ellant and their client is for specific job of fabrication of tugs and barges out of raw material like steel plates etc. supplied by their client and the charges for such fabrication is on lump-sum or per ton basis. He submits that from the contract it is clear that appellant have undertaken job of fabrication of tugs and barges and there is no supply of labour to their client therefore, activity does not fall under the category of "Manpower Recruitment or Supply Agency Service". In this regard he referred to the relevant clauses of the contract whereby he submits that the contract is not for supply of manpower but specifically for fabrication of barges and tugs which does not fall under 'Manpower Recruitment or Supply Agency Service'. He also submits that the activity of the appellant is of manufacturing which is evident from the undisputed fact that with effect from 01.03.2011, Central Excise duty was levied on the manufacture of tugs and barges. The appellant took Central Excise registration and paid Central Excise duty during the years 2011-12 and 2012-13 respectively. This also shows that the activity is not of supply of manpower but of manufacturing. He submits that identical....

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.... the Raw material, Machineries, Equipment accessories (except welding material & gas) required for the purpose of construction of the said barge shall be supplied by the owners to the contractors. 3 to 13 ....... ....... ....... 14. It is mutually agreed by the party of the both the part that the contractor will, execute the entire work at Rs. 30,00,000/-(Rupees thirty lakhs only) absolutely on turnkey basis only. The details for the same are mentioned in schedule No 2. TDS shall be deducted as per the Rate applicable under the TAX ACT. The schedules referred to above: Schedule No 1: Details of the barge to be constructed. Self propelled twin screw ore carrier barge fitted with Cummins make NT 855 m engines 2 Nos. coupled with Z F marine W-320, 4.526:1 Ratio gear box. Schedule No 2: Scope & Specification of labour job (Turn Key Basis) Mobilization with Total Accessories, Electricity, Welding machine, Gas cutting equipment's and Stagings, Ghodies Stool Foundation and also A generating set suitable for at least 5 welding machines. You shall provide complete security to our material and barge from filtration. ....

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.... the barge, the same is delivered to the clients. With these conditions in MoU between the appellant and their client it is clearly fabrication of barge and delivery of the same to their clients. 6. The Adjudicating Authority simply relied on certain terms which speak about the terms of deployment of workman by the appellant. It is obvious that for carrying out any job workman has to be deployed. In the present case the workmen are employed with the appellant not with the service recipient. All the labour force is in the control of the appellant and the recipient of service has no concern about the profession of the labour. Since the appellant has an obligation to fabricate the barges, it is the appellant who has to use their own work force for carrying out the work. In the memorandum there is no whisper of supply of manpower, number of manpower, consideration payable to manpower etc. on the part of the service recipient. The sample invoice scanned supra also clearly shows that the appellant have charged for the fabrication of barges and tugs belonging to their client and the charges for such fabrication was also made, for example, Rs. 18,000/- per ton of weight of barges fabric....

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.... had not paid any specific price to the workmen/ Labour deployed by the appellant. Thus, under such circumstances, it cannot be said that the appellant had provided the Manpower Recruitment and Supply Agency Service. The documents submitted by the appellant indicate a lump sum charge for the work undertaken by them. There is no evidence of supply of manpower with details of number and nature of manpower, duration and other conditions for such supply. In absence of such evidence, the job work charges cannot be taxed under "Manpower Recruitment and Supply Agency Service". Hence, we are of the considered view that the adjudged demand confirmed on the appellant cannot be sustained. 8. Therefore, we do not find any merits in the impugned order. Accordingly we set aside the impugned order and allow the appeal with consequential relief, if any, as per law. (b) In the case of Matadin Mali vs. CCE&ST, Ahmedabad (supra) the Tribunal held as under:- "6. We have carefully gone through the relevant contract entered into by Appellant with M/s Pino Bisazza Glass Pvt. Ltd and find that M/s. Pino has entered into agreement with the appellant for packing and salvaging acti....

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....y the 'Contractor' neither he nor any of his official will supervise, dictate to the employees the manner of execution/completion of the job. 5. The 'Principal will not be entitled to retain any control, supervision or the manner of the discharge, dismissal or retrenchment or re-employment of the workers engaged/employed by the 'contractors'. 6. That the 'contractor' will be liable for due observation and implementation of the statutory conditions and requirements of Labour and Factory laws duly complied with as applicable from time to time to his employees. 6. On perusal of the conditions contained in the agreement, it reveals that the manpower/employees deployed for executing the assigned task were under the control and supervision of the appellant and the activities undertaken pursuant to the agreement relate to the work of material handling and shifting. Since the appellant was in no way connected with any recruitment or supply of manpower to the client, rather the manpower/employees were under the active control and supervision of the appellant and were deployed for undertaking the assigned job work entrusted by the principal, in our considered view,....

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....he appellant was paid for carrying out such activities on per meter basis. The workmen deployed by the appellant for carrying out such activities were under the supervision and control of the appellant. The ultimate manufacturer, who entrusted the job to the appellant was no way concerned with the workmen deployed by the appellant. It is also noticed that over and above paying the amount for manufacturing activities undertaken by the appellant on job work basis, the said service receiver had not paid any specific price to the workmen deployed by the appellant. Thus, under such circumstances, it cannot be said that the appellant had provided the Manpower Recruitment and Supply Agency Service. Hence, we are of the considered view that the adjudged demands confirmed on the appellant cannot be sustained. 7. Therefore, we do not find any merits in the impugned order. Accordingly after setting aside the same, we allow the appeal in favour of the appellant." 9. From the above judgments it can be seen that even though manpower was deployed by the service provider but the job is for specific activity such as manufacture, processing etc. and charges is paid on the basis of job an....