TaxTMI 
TaxTMI 
2023 (12) TMI 75
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....f the Finance Act, 1994; ii. I confirm recovery of interest on the demand of service tax of Rs. 72,73,695/- against M/s U.P State Bridge Corporation Limited, 218, PWD Colony, Civil Lines, Meerut under Section 75 of the Finance Act, 1994. iii. I impose penalty of Rs. 72,73,695/- (Rupees Seventy Two Lac Seventy Three Thousand Six Hundred Ninety Five only) i.e. equal to the demand of Service tax of Rs. 72,73,695/- under Section 78 of the Finance Act, 1994 against M/s U.P State Bridge Corporation Limited, 218, PWD Colony, Civil Lines, Meerut. The benefit of reduced penalty i.e. equal to 25% of the total penalty imposed shall be available to the party as per clause (ii) of Second proviso to Section 78 of the Finance Act, 1994 if they deposit due service tax and interest amount along with reduced penalty within 30 days of receipt of order. iv. I impose penalty of Rs. 10,000/-(Rupees Ten Thousand only) upon M/s U.P State Bridge Corporation Limited, 218, PWD Colony, Civil Lines, Meerut under Section 77 of the Finance Act. 1944." 2.1 Appellant is registered for payment of service tax under Reverse Charge Mechanism on taxable services namely Goods Transport Agen....
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....ice tax mentioned at Sl. No. (i) above, should not be demanded and recovered from them under Section 75 of the Finance Act, 1994; V. Interest on the amount of service tax mentioned at Sl. No. (ii) above, should not be demanded from them under Section 75 of the Finance Act, 1994. An amount of Rs. 7899/- already deposited by them against interest should not be appropriated against the said demand of interest; VI. Interest on the amount of service tax mentioned at Sl. No. (iii) above, should not be demanded from them under Section 75 of the Finance Act, 1994. An amount of Rs. 10,177/- already deposited by them against interest should not be appropriated against the said demand of interest; VII. Penalty should not be imposed upon them under Section 78 of the Finance Act, 1994 for non-payment of Service tax amounting to Rs. 72,73,695/- (Rupees Seventy Two Lakh Seventy Three Thousand Six Hundred Ninety Five Only), involved on Supply of Manpower Service and Security Service, under reverse charge mentioned at SI. No. (i) above; VIII. Penalty should not be imposed upon them under Section 78 of the Finance Act, 1994 for non-payment of Service tax amounting....
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....ited supervision and control for quality purpose alone was exercised by the appellant, treating it as manpower contract through it was for construction related activities. The present dispute involves works undertaken by the appellant though contractors related to activities stated above, which has been considered as manpower service though the term itself shows that these are activities related to construction. The demand was made under reverse charge mechanism as applicable under Notification No. 30/2012-ST dated 20.06.2012 and confirmed by the impugned order. • The works given to the contractors for which neither competitive bidding nor tenders are invited as per the policy of the appellant. These are fix rate works approved by PWD or Bridge Corporation and corporation has set numbers of contractors who are always available for such work. The site Engineer's statement which has been relied upon do not support the case of the revenue. The site engineer had admitted that they have sufficient technical staff and labour with them. He has also categorically stated that the contractual labour is procured for activities like pouring of concrete, shuttering and centering, r....
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....rforming various activities such as pouring of concrete, shuttering fixing & removal, curing, reinforcement steel cutting, bending and placement, shifting of material etc. 7.3 The appellant has contended that the work assigned to contractor is not in the nature of supply of manpower but specific job the nature of which is duly recorded in the contract agreement; that Order has been passed without considering the relevant purchase orders and bills such as M / s Juneja Construction (P) Limited, Meerut, M / S RCC Developers Limited, Meerut, M/s Shri Dimag Singh and M/s Shivalik Infraventures (P) Limited and four other sample contracts which shows that the nature of work which had been allotted to the contractors were not for manpower but for work like pouring of concrete, shuttering and centring, reinforcement work and local shifting of shuttering & centring and that the payment has been given to the contractors on the basis of per metric/per cubic meter/per beg/per beam/per job/per point etc. basis 7.4 I have gone through the findings of the adjudicating authority and find that the adjudicating authority has categorically discussed the issue of supply of manpower in....
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....taken by the party that services of petty contractors were specific jobs and not supply of man power is without any basis. Contract wise details are given below- (i) Quotation/Offer dated 20.03.2014- It pertains to repair work described as "M.S or iron work of small size and section---------." This has no linking with the present issue. (ii) Agreement dated Nil related to M / s Dimag Singh, 26, Ganna Society Market, Khatauli- It pertains to GSB Work & WMM work for ROB-55, Mewla Bridge, Meerut. The facts of this document are entirely different. (iii) Agreement dated 17.11.13 of M/s Shivalik Infraventures (P) Limited, Saharanpur is related to WMM, Prime Coat Tack Coat etc (iv) Agreement dated 30.07.2014 of M/s Juneja Construction Pvt Limited is related to work defined as DBM, BC, Prime Coat etc. (v) Agreement dated 01.06.2013 of M/s RCC Developers Limited, Meerut is related to laying of GSB 115 MM and laying of W.M.M 125 MM Abu Nala Bridge Meerut. Thus, in view of the facts discussed above and admittance of the party in their letter dated 20.10.2014 and affirmed by Sh.Vinod Kumar Singh, Assistant Engineer in his statement dated 12....
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....e 2(g) of Service Tax Rules, 1994 reads as under- Rule 2(g) "supply of manpower" means supply of manpower, temporarily or otherwise, to another person to work under his superintendence or control. Thus, to fall under the category of "Supply of manpower" following two criterions must be satisfied- (i) There should be supply of manpower temporarily or otherwise and (ii) The labour should work under the superintendence and control of the principal. 7.7 I find that Sh. Satish Kumar, Project Manager of the appellant in his letter dated 20.10.2014 had categorically admitted that following works constitute labour work only and completed under supervision of their technical staff- (i) Pouring of concrete (ii) Shuttering and centring (iii) Reinforcement work (iv) Local shifting of shuttering & Centring and reinforcement at site. I further find that Sh. Vinod Kumar Singh, Assistant Engineer & authorized person of the appellant in his statement dated 12.02.2015 recorded under Section 14 of the Central Excise Act, 1994 had admitted that the company has sufficient number of technical staff, labour and mass....
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.... which indicates that this is a labour contract for supply of manpower. Similar is situation in the contract dated 7th May, 2014, which is also reproduced bellow for ready reference:- 4.5 This contract is also not in respect of any supply of labour but the same is for execution of the work. Similarly, the contract dated 12 November, 2013 also reproduced below, do not show that this is a contract for supply of manpower:- 4.5 The invoices raised against these contracts are not for supply of labour but are for supply of material. Work done under these contracts is for undertaking a work activity involving supply of material also. Then on what basis revenue could have concluded that these activities amounted to 'Supply of Manpower Service' to the appellant for demanding service tax. 4.6 We also perused the documents of the appellant, stating General Terms and Conditions (GSB & WMM Work), and some of them are reproduced bellow:- "2. The Quantities indicated in BOQ are tentative and can vary +/- 20% as per site conditions which is at the sole discretion of UPSBC. The work is tto be done for all leads and lifts for supply of material. 3. Contractors bidding for ....
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....b-section (1), in respect of [such taxable services as may be notified] by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rate specified in Section 66B and all the provisions of this Chapter shall apply to such person as if he is the person liable for paying the service tax in relation to such services: Provided that the Central Government may notify the service and the extent of service tax which shall be payable by such person and the provisions of this Chapter shall apply to such person to the extent so specified and the remaining part of the service tax shall be paid by the service provider Notification No. 30/2012-ST dated 20.06.2012 In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), ..., the Central Government hereby notifies the following taxable services and the extent of service tax payable thereon by the person liable to pay service tax for the purposes of the said sub-section, namely:- (I) The taxable services,- A. i....... (v) provided or agreed to be provided b....
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....ting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property;" If any tax has been short paid by the appellant then it could be under this category and not in the category of Manpower Supply service. 4.11 In respect of the Works Contract Services the charge of service tax is on the service provider and not on the service recipient in terms of the above provisions. Accordingly, the demands made by the revenue by invoking the provisions of Section 68 (2) do not stand in the test of law. Accordingly, these demands are to be set aside. 4.12 Further, Counsel for the appellant has relied upon the various decisions which have held that which supports the case for holding that the services received by the appellant do not qualify as Manpower Supply Services. Though, we agree with the principals lead down in the said decisions but we are not in a position to follow the said decisions as they are for the period prior to the amendments made in the year 2012, when the charge of service tax was on the basis of definition of various services. All though, the princi....
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....similar facts following has been held: "6. We have carefully considered the rival submissions and also perused the agreements entered into by the appellant with the sugar factory as also with the transporters. From the agreement dated 2-1-2006 with the sugar factory, it is seen that the same is for cutting and transportation of sugarcane from the farmers' fields to the sugar factory, who have agreed to sell their sugarcane to the sugar factory. The agreement is not for supply of any labour. The rates agreed upon for the said work are per tonnage of sugarcane supply, both for harvesting as well as transportation. This would clearly indicate that the activity undertaken cannot, by any stretch of imagination, be called supply of manpower. We have also perused the agreement entered into between the Trust and the transporters and as per this agreement, it is for the transporter to engage labour for harvesting and transporting the sugarcane to the sugar factory and the rates agreed to be paid are on tonnage basis of the sugarcane supplied and not for the supply of any manpower. From these agreements, it is obvious that no manpower has been supplied by the appellant to the sugar ....
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.... has been given to the appellants is for the execution of the work of loading, unloading, bagging, stacking destacking etc., In the entire records, we find that there is no whisper of supply manpower to the said M/s. Aspin Wall & Co. or to CWC or any other recipient of the services in both these appeals. As can be seen from the reproduced contracts and the invoices issued by the appellants that the entire essence of the contract was an execution of work as understood by the appellant and the recipient of the services. We find that the Hon'ble Supreme Court in the case of Super Poly Fabriks Ltd. v. CCE, Punjab (supra) in paragraph 8 has specifically laid down the ratio which is as under : "There cannot be any doubt whatsoever that a document has to be read as a whole. The purport and object with which the parties thereto entered into a contract ought to be ascertained only from the terms and conditions thereof. Neither the nomenclature of the document nor any particular activity undertaken by the parties to the contract would be decisive." An identical view was taken up by Hon'ble Supreme Court in the case of State of A.P. v. Kone Elevators India Ltd. (supra) and U....
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....b/lump-sum work given to the appellants for execution. The said clarification issued by the Board would be appropriate in the case where services of man power recruitment & supply agency, had been temporarily taken by the Business or the industrial association for supplying of manpower and may/may not be for execution of a specific work. We are of the considered view that the reliance placed by the learned SDR and the learned Commissioner on the circular will not carry the case of the Revenue any further. 4.16 It is evident from the above stated case laws that the contract/ agreement entered between the parties should be read as whole and understood as whole. There is no scope for interpreting the agreement differently from what has been stated in the contract/ agreement. A work contract agreement will involve supply of services for which certain manpower will be deployed. Just for the reason that the manpower was deployed by the appellant nature of agreement cannot be changed from the one that was intended between the contracting parties. For the reasons as stated above we do not find any merits in the impugned order. 5.1 Appeal is allowed. (Pronounced in open Court on- 0....
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....rks and remedy any defects therein in Conformity in all respects with the provision of Contract In witness whereof the parties hereto has caused this agreement to be executed the day and year first before written. For on behalf of U.P. State Bridge Corp. Ltd. Signature. 077 017/6/13 Name...AT...KUMAR Uv. Project Managst State Bridge Corpn. Ltd Designatione Com Wolt. MEERUT Witness Signature and Name S. AGRAWAL Address .U.P. State Bridge Co M. L.T For on behalf of M/s RCC Develpoers, Meerut Signature Name t Designation МБ Signature... Name Yogesh Kumas Designation Acccount o'tial UP.53040 Meerut Document 3 Annerge 15 04/P.m Camp/ Food POR Red-1/2010-2015 à¤à¤¾à¤°à¤¤à¥€à¤¯ गैर नà¥à¤¯à¤¾à¤°à¥à¤¥à¤¿à¤• à¤à¤• सौ रà¥à¤ªà¤¯à¥‡ 00100 100 सतà¥à¤¯à¤®à¤¤à¥à¤° Rs. 100 ONE HUNDRED RUPEES à¤à¤°à¤¤ INDIA, 100100.100100 100100100100 100100 00100100100.. 0100100100 78818812210010010010010010010818818 20100100....
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....mpletion of the work and the remedying of defects therein in the contract price of such other sum as may become payable under the provisions of the contract at the times and in the manner prescribed by the contract. In-witness whereof the parties hereto hence caused this agreement to be executed the and year first written UP. State Bridge Corporation Ltd. day Signature Name: SATISH KUMAR 30/7/14 Designation: For on behalf of M/s Juneja Construction Pvt. Ltd., 4/61. Malviya Nagar, New Delhi-110017 Signature Name: Designation: Witness |- Name: Sri V.K. Singh, Assistant Engineer (C) Address BCU, Meerut Name: Address: Yogesh Kumar Reenend 20 23/8/14 A.O. Be Merrit Document 5 22 No: 321A, PM Camel Bitomes Watt PCB BCB SRE/2015 à¤à¤¾à¤°à¤¤à¥€à¤¯ गे à¤à¤• सौ रà¥à¤ªà¤¯à¥‡ 5100 งบ100 यायिक Rs. 100 ONE HUNDRED RUPEES à¤à¤¾à¤°à¤¤ INDIAY 100100100100 100100100100 001001 1001 100 REASURY OFFICE 12 2013 100100 00100100100 INDIA N....