TaxTMI 
TaxTMI 
2023 (9) TMI 652
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....Manpower Recruitment or Supply Agency Service' to M/s Intricast Private Limited hence, the service tax is leviable on the amount paid to the appellant for these services. The adjudicating authority dropped the proceedings of the show cause notice on the ground that the appellant had executed lump sum work/ job and execution of such lump sum work/ job work not covered under 'Man Power Recruitment or Supply Agency Service'. Being aggrieved by the order-in-original, Revenue filed appeal before the Commissioner (Appeals) who allowed the Revenue's Appeal and held that the appellant is liable to pay service tax under 'Man Power Recruitment or Supply Agency Service'. Therefore, the appellant has filed the present appeal. 2. Shri S. Bissa, learned counsel appearing on behalf of the appellant submits that learned Commissioner (Appeals) has committed an error in confirming the service tax liability on the appellant under the category of 'Man Power Recruitment or Supply Agency Service' because the appellant has received payment on the quantum of the work performed i.e. quantities of castings on which the wax repairing or assembly work was done, and not on man-hour or man-day basis and ther....
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.... dispute that the appellant have provided particular job of wax repairing and assembly department work for M/s Intricast Private Limited. To understand the actual nature of the work and the consideration made by the service recipient it is necessary to go through the work order and invoices which are scanned below: The relevant clauses of the work order is extracted herein below: "INTRICASE PVT LTD STEEL AND ALLOY STEEL INVESTMENT CASTING MANUFACTIRERS W.O. NO ITL-002/2011-12 DATE 01.04.2011 TO Mr Naresh K Solanki Sarvoday Society, Opp. Aero cast private limited, Veraval (Shapar) Subject: Work order of wax repairing and assembly department work 1. Complete details of the work under the work order After wax injection, all the work related to repairing, assembling and wax preparation and runner making of the injected pattern should be done by wax as per the target and all of them should be kept safely in the right place, housekeeping should be informed during the work. 2. Work order price detail:- The work done by your department is a part of the company's scheduled production process and....
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....Business Auxiliary Service' i.e. production or processing on behalf of their clients. However, the demand was not proposed under the said head. This issue has been considered in catena of judgments. Some of the judgments cited supra are reproduced below: * Dhanashree Enterprise vs CCE Pune-I "5. We find from the show cause notice that though the department has proposed the service of the appellant as classifiable under Manpower Recruitment or Supply Agency service but no evidence was adduced to conclusively hold that the service is of Manpower Recruitment or Supply Agency service. The figure of the service tax was retrieved from the bank account which does not show what is the basis of the service charge by the appellant to the service recipient. Therefore, we do not find any material evidence in the show-cause notice to hold that the appellant are providing Manpower Recruitment or Supply Agency service. On the contrary, the appellant submitted an agreement with the service recipient. The relevant clause of the agreement are reproduced below :- "This AGREEMENT made at Pune on this 1st day of April month of the year Two Thousand Seven BETWEEN Kalyani Lemme....
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.... The contractor's bills for Piece Contract should be submitted on a monthly basis latest by the 3rd of .every month, for the previous month and shall be certified by the Head of the Department/shop, where the contract work was entrusted. (c) The amounts specified hereinabove are agreed inclusive of all costs, charges, expenses, wages to workmen and any other expenses that may be incurred by the contractor and the contractor shall not be entitled to make any other demands monitory or otherwise whatsoever from the company during the term of agreement. 3] CONTRACTOR'S RESPONSIBILITY : (a) For performing the above said work the contractor should arrange to sufficient workforce to carry out the task as per requirement time to time. (b) The contractor shall employ sufficiently experienced person to undertake the supervision of work being carried out by the per piece basis. (c) The quality and quantity of work at all stages should be as per the standard laid down in Annexure "A". (d) The contractor shall ensure that he complies with and observes all the provisions of the Contract Labour (Reg. & Abol.) Act, 1970. The Minimum Wages A....
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....ed time to time). iv. All rate are finalized as per the pieces produced (Piece Rate) time to time. B. SCOPE OF WORK i To maintain good cleanliness and housekeeping in Factory premises after carrying the piece rate activity. C. SUPERVISION i To ensure adequate supervision and control for all above mentioned activities. 6. The identically worded agreement was also entered into by both the appellants with Kalyani. From the reading of the agreement and Annexure A it can be seen that the service is the production ancillary associates and rates for the service is on per piece rate of the pieces produced. Therefore the appellant's job is not to depute the labour to the service recipient, irrespective of the number of labours, the respondent has to perform the job of producing piece for the service recipient and the rate is on per piece basis. Therefore, the wages/salary or emolument paid to the labour is not relevant to the service recipient. That is the responsibility of the appellant. Against this evidence the department right from show-cause notice up to the Commissioner (Appeals) could not bring any material to show that there is a....
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....-11-2003 and further Discussions had with you on the handling of bulk bagged fertilizers in our Bagging Plant. We have pleasure in awarding you the handling job for a period of further two years as per the following rates, terms and conditions: Inside the Plant :- Feeding bags for filling bulk, stitching shifting bagged cargo and Stacking De stacking and loading bagged cargo on to long trucks De stacking and loading onto trucks for wagon loading High stacking above 15 tier Employment of casuals for tipper cleaning, and in the plant, Providing shovels buckets etc Service charges Side godowns : Unloading and stacking wagon cargo Dc stacking and loading Re standardization of c/t bags Casuals for sweeping collection Service Charges Gunny handling Unloading HDPE Bales Reloading of HDPE ales Rs. 13.75 per mt Rs. 06.00 per mt Rs. 09.00 per mt Rs. 03.00 per mt Rs. 03.00 per mt Rs. 03.50 per mt Rs. 12.75 per mt Rs. 10.00 per mt Rs. 25.00 per mt Rs. 00.50 per mt Rs. 03.00 per mt Rs. 04.00 per mt Rs. 04.00 per mt 1. The rates given above shall be firm without an....
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....nsport contract at Central Warehouse, Mannangudda, Mangalore. We are pleased to award the contract at the above centre with effect from 1-1-2005 for a period of 3 (three) months with a provision to extend for a further period of three months at the following negotiated rate:- 1. Handling Services, Above Schedule of Rates (Appendix VI) : 162% (one hundred sixty-two percent); 2. Transportation to and from goodshed to Warehouse and vice versa: Rs. 54/- (Rupees fifty four only) per MT ONLY ON POINT TO POINT BASIS. 3. Internal Transportation : Rs. 20/- (rupees twenty only) per MT only on point to point Basis. You are advised to comply with the following requirements by 31-12-2004 :- 1. Execute an agreement on a stamp paper of appropriate value but not less than Rs. 100/- as per the latest stipulation of Government of Karnataka along with two witnesses to the agreement. 2. The Security Deposit of Rs. 60,000/- (Rupees sixty thousand only) in the form of Demand Draft. 3. Obtain the license under Contract Labour (R&A) Act, 1970 from the concerned - RLC(C)/ALC(C) in case 20 or more labourers are engaged on any day during....
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.... that the entire tenor of the agreement and the purchase orders issued by the appellants' service recipient clearly indicates the execution of a lump- sum work. In our opinion this lump-sum work would not fall under the category of providing of service of supply of manpower temporarily or otherwise either directly or indirectly. 10. On perusal of the records and the submissions of learned SDR on the Master Circular dated 23-8-2007, we find that the issue is raised at clause 010.02 is as under : Business or industrial organizations engage services of manpower recruitment or supply agencies for temporary supply of manpower which is engaged for a specified period or for completion of particular projects or tasks. Whether Service tax is liable on such services under manpower recruitment or supply agency's services? In the case of supply of manpower individuals are contractually employed by the manpower recruitment or supply agency. The agency agrees for use for the services of an individual, employed by him to another person for a consideration. Employer- employee relationship in such case exists between the agency and the individual and not between the individual and....
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....ervice, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person." 6. In view of provisions of Section 65(68) the "Manpower Recruitment or Supply Agency Services" means any person providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person, and Section 65(105)(k) defines the taxable services for providing such services. From the above definitions, it is rather clear that it envisages supply of labour which can be classified as "Manpower Recruitment or Supply Agency Services". In the case in hand, there is no supply of labour to the sugar factory concerned. The respondents have undertaken the activities of harvesting of sugarcane and transporting the same to the sugar factory for which labour is employed. 7. Having regard to the nature of contract between the respondents and sugar factory and the scope of definitions mentioned above, it appears that the Appellate Tribunal has rightly come to the conclusion that the respondent's work, though provided services to the sugar factory, did not come within the mischief of ....
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....s have executed the work in lump-sum. The department is of the view that the activity undertaken by the appellants are covered under Manpower Supply Services, therefore impugned demands were confirmed after issuing a show-cause notice to the appellants. 4. On perusal on the case records we find that the appellants are engaged in the activity of crushing of stones and supply the same to their customers as per agreement entered between them on rate contract basis. In the earlier period a similar issue came before the Tribunal in the case of Divya Enterprises v. CCE, Bangalore as reported in 2010 (19) S.T.R. 370 (Tri.-Bang.) wherein the appellant was executing the work of loading, unloading, bagging, stacking etc. on contract basis. In that case also the department was of the view that the appellant was liable to pay service tax under the category of Manpower Supply Services wherein the Tribunal has held that lump- sum work are given to the appellant for execution and this lump-sum work would not fall under the category of providing of service of supply of manpower. Therefore, following the precedent decision in the case of Divya Enterprises (supra), we hold that the activity....