TaxTMI 
TaxTMI 
2026 (8) TMI 99
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.... penalties under section 76 and 77 of the Act. The Additional Commissioner had, in his order, confirmed the proposals in the Show Cause Notice dated 6.12.2012 [SCN] issued to the appellant and confirmed demand of service tax of RS. 12,50,639/- for the period 2008-09 to 2010-11 with interest and penalties. 2. We have heard learned counsel for the appellant and the learned authorised representative for the Revenue and perused the records. The only points of contention are the demand of service tax under the proviso to section 73(1) of the Act with interest under section 75 of the Act and the mandatory penalty under section 78 of the Act. 3. The appellant was registered with the service tax department for providing services during the relevant period. During audit of the records of M/s S S Ispat, it was found that the appellant had rendered 'manpower recruitment and supply service' to M/s. S S Ispat under an agreement but had not paid the service tax on this service. The SCN, OIO and the impugned order hold so. 4. The appellant's contention is that it had not rendered manpower supply service but had, in fact, acted as a job worker and carried out the entire process of manufac....
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....forensic audit of the books and accounts of the service recipient, M/s S.S. Ispat, Bhilai, conducted by the Accountant General (Audit) Chhattisgarh. The Appellant had recovered the full applicable Service Tax amount alongside the service value from the recipients but pocketed and failed to deposit it into the government exchequer. (ii) Despite written requests from the Service Tax Range Raipur to produce ledgers and annual reports, the Appellant refused to comply. (iii) Therefore, the appellant's place was searched on 17.11.2012 and critical evidence including a bill book and loose papers was seized under Panchnama. (iv) Shri Padam Charan Guman Singh (Proprietor) voluntarily admitted in his signed statement dated 17.11.2012 that he had rendered taxable labor supply services to M/s S.S. Ispat and had intentionally failed to discharge the service tax liability. The same has not been retracted till date. (v) The submission of the appellant that it was indeed engaged in production activity and not manpower supply is without force. No valid contract relevant to the period was produced. The contract produced by the appellant expired on 31.3.2007 (well ....
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....nfortunately, the contracts for the relevant period are not on record. The appellant has produced an old contract (page 34 of the appeal) which had expired on 31.3.2007. Learned counsel made a statement at bar that the nature of contracts for the subsequent periods was also the same. In the absence of contracts for the relevant period, we accept the statement of the learned counsel and consider this contract itself to decide this appeal. It reads as follows: To Shri P G Singh [Contractor] House No. J-237, Veer Sawarker Nagar Heerapur, Raipur Sub: Work Order for Labour Contract D/Sir, With reference to your application and subsequent discussion held on 31/2/2006, we are pleased to appoint you as a Labour Contractor as per the following Terms & Conditions: 1] You will be engaged your labour of our establishment at our factory from 1/4/2006. 2] Your work responsibility is sand mixing, coring, moulding, heating of core, baking of moulding boxes in heat room, charging, casting of Ingot Mould and General Item, finished goods chipping and grinding and cleaning of slag & other work activities upto dis....
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....t 'no labour charge rejection' will be given. In plain words, SS Ispat has undertaken not to refuse to pay the labour bills produced by the appellant. 15. There are no standards laid down either with regard to the number of labour to be employed or to the quality of the output, production, productivity, penalties for failure to meet the benchmarks, etc. 16. It has been held by the Supreme Court in Adiraj that a contract has to be read as a whole and in a contract for manpower supply payment could be based on the work. 17. Reading the above clauses as a whole leaves no manner of doubt that it was a work order for labour contract which is what the appellant applied for and after discussions which is what was offered to by SS Ispat and accepted by the appellant. 18. Although the measure of consideration is on Rs. per MT basis, the bills are, explicitly stated to be labour bills to be submitted by 7th and to be paid by 10th of every month. It is for this reason, SS Ispat also wanted all challans of PF and ESIC of the workers to be given to it. Had it been a job work, who the contractor engages to get the work done and how he pays them are irrelevant to the principal. For in....