TaxTMI 
TaxTMI 
2026 (6) TMI 177
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....ue of man power supply service on reverse charge basis (RCM). Accordingly, show cause notice dated 27.11.2015 was issued to appellant by invoking extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 for demanding service tax of Rs.1,67,291/- for the year 2012-2013 to 2014-2015 under man power supply service on RCM basis along with interest under Section 75 of the Finance Act, 1994 and penalty under Section 78(1) of the said Act. It was alleged that they have suppressed the fact of receipt of manpower supply service from the department and thus, evaded payment of service tax. The show cause notice mentioned that the appellant was having centralized service tax registration with Kolkata Service Tax Commissionerate. 1.2 The matter was decided by the Assistant Commissioner vide order dated 04.05.2017 wherein, he confirmed the service tax demand of Rs.1,67,291/- along with interest and also imposed equal penalty under Section 78. Aggrieved with this order, the appellant filed appeal before the Commissioner (Appeals) who upheld the order of the lower authority by rejecting their appeal. Hence, the present appeal before this Tribunal. 2. In their app....
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.... * Learned Commissioner (Appeals) has justified invocation of extended period of limitation when there is no willful mis-statement or suppression of fact in this case. Had they paid service tax under reverse charge mechanism, they would have been entitled to the Cenvat Credit. Therefore, as held by Hon'ble Supreme Court in the case of Nirlon Ltd reported at 2015 (320) ELT 22 (SC), there cannot be any question of evasion of duty in case of revenue neutrality. These principles were further followed by Hon'ble Madras High Court in the case of CCE Vs. Tenneco RC India Pvt. Ltd. reported at 2015 (323) ELT 299. In view of the above, appellant pleaded for allowing their appeal by setting aside the impugned order. 3. During arguments, learned Advocate submitted that the contract entered into between the appellant and Mr. Shyam B. Mandal, makes it clear that the contract is on completion of work and payment is on Per MT basis. The entire work is to be done by the contractor by deputing suitable number of persons under his supervision and control. Revenue has no evidence that man power were supplied by the contractor who were under the supervisory control of the appellant. He place....
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....ther than completion of specific measurable output. Regarding jurisdiction, he states that the taxable event i.e. receipt of manpower supply service and payment to the contractor occurred at Vapi plant, hence, Valsad Commissionerate has rightly exercised their jurisdiction. He also defended invocation of extended period on the ground that the appellant failed to disclose these transactions in ST-3 returns and the same could only be found out by the officers during audit of their records. Learned AR pleaded that the impugned order be upheld and the appeal filed by the appellant be set aside. 5. We have heard the rival submissions. We find that there are two main issues in this case- (a) Whether action to issue show cause notice by Vadodara Audit- III Commissionerate and it's adjudication by Valsad Commissionerate is beyond jurisdiction as the tax payer was centrally registered with Kolkata Service Tax Commissionerate? (b) Whether in the facts of the case, appellant has received man power supply service from Mr. Shyam B. Mandal and is liable to pay service tax on reverse charge basis? 5.1 On the first issue, we find that CESTAT Allahabad in the case of MIRC El....
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....h the contention of the appellant and hold that the action to issue show cause notice by Vadodara Audit III and demand confirmation order passed in this case by Valsad Commissionerate are beyond jurisdiction. On this ground itself, the demand of Service Tax does not survive. 5.4 On merits, we find that the appellant had entered into a contract with Mr. Shyam B. Mandal for loading and unloading of material, batch charging of production, unloading of import material and loading of export goods in containers etc. Copy of one such work order dated 01.01.2014 is reproduced below:- As per above contract, the work entrusted to the contractor was for loading and unloading of material bags, loading and unloading of batch charging for production and loading of export cargo and unloading of import cargo on behalf of the appellant. The payment to the contractor was on per MT basis. Under the heading, "Supervision and Control", it is mentioned that "the contractor shall under his supervision and control shall ensure that his workers perform his work diligently and take all precautions to ensure that goods are lifted safely and properly and no damage is being done to the materials at the t....
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....d work and control over the workman and supervision was always with the appellant, it cannot be said that the activities undertaken by the appellant fall under the category of man power recruitment or supply agency service, for levy of service tax. 5.8 Relying on above decisions, we hold that the present contract is not for man power supply service. Therefore, demand of service tax from the appellant does not survive on merits also. In view of the above, revenue's case does not survive on both the counts. Accordingly, we set aside the impugned order dated 16.05.2018 and allow the appeal filed by the appellant. 6. The appeal is allowed. (Pronounced in the open court on 02.06.2026) ============= Document 1 HIMADRI CHEMICALS & INDUSTRIES LIMITED MFGR. OF : COAL TAR BY PRODUCTS Ref .: WO/VAPI/13-14/C011 Work Order Mr. Shyam B. Mandal Room No. 34, Mahadev Nagar Chhiri Hari Om Society, Pardi Dist - Valsad Vapi - 396195 Date : 01-01-2014 Sub: Loading, Unloading and Charging of the Materials. With reference to the verbal discussion and subsequent negotiation with you, we are pleased to place our work order for Loading, Unloading and charging of materials at ....