TaxTMI 
TaxTMI 
2026 (8) TMI 1218
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....d, followed by another SCN dated 10.04.2019 was issued for the period 2016-17 to 2017-18 (upto June 2017) on identical grounds. The matters were kept in the call book (SCN-1 for over six years) awaiting the outcome of the identical dispute of the Appellant's WB unit before this Tribunal. Consequent to disposal of the appeal by this Tribunal, the common impugned OIO dated 11.12.2023, was passed by the adjudicating authority confirming the entire demand as under: Head of demand (RCM) Amount confirmed (Rs.) Manpower supply - SCN-1 (2012-13 to 2015- 16) 1,93,36,365 Manpower supply - SCN-2 (2016-17 to June 2017) 85,15,971 Security services (FY 2014-15) 1,90,421 GTA services (FY 2014-15 & 2015-16) 14,22,360 Legal services - SCN-1 (2013-14 to 2015-16) 8,52,491 Legal services - SCN-2 (2016-17) 24,38,923 Total confirmed (net of Rs. 11,536/- paid during audit) 3,27,44,995 Penalty u/s 78 (SCN-1) + u/s 76 (SCN-2) 2,17,90,101 + 10,95,489 3. The submissions made by the Appellant are summarized as under: MANPOWER SUPPLY (Rs. 2,78,52,336/-): THE ISSUE IS SQUARELY COVERED IN THE APPELLANT'S OWN CASE - THE ACTIVITY IS A PROCESS AMOU....
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.... (i) the nature of the process, (ii) quality/facilities/infrastructure, (iii) delivery schedule, (iv) work specifications, or (v) consequences of breach. However, in this case, the Appellant's agreements contain precisely these stipulations - prescribed processes, specifications, hygiene and packaging quality standards; agent's responsibility for tools and equipment; and conversion charges fixed per quantity under the Schedule. On the Apex Court's own test, the agreements are job-work/conversion contracts. Accordingly, the Appellant submits that the ratio of the said decision is not applicable to the facts and circumstances of this case. 3.5. The Appellant submits that the sole basis on which the demand has been confirmed in the OIO is that the Appellant was responsible to ensure the agents' ESI/PF compliance. The Appellant submits that such obligations flow statutorily to every principal employer under the Contract Labour (Regulation and Abolition) Act, 1970, and cannot convert a conversion contract into 'supply of manpower' under Rule 2(g) of the Service Tax Rules, 1994. Supply of manpower contracts require th....
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....ary-freight ledger, established by the ledgers on record. Thus, the Appellant submits that the demand confirmed under this category of GTA service is not sustainable. IV. LEGAL SERVICES (Rs. 8,52,491/- + Rs. 24,38,923/-): PAYMENTS NOT MADE TO ADVOCATES 7. The Appellant submits that the Complete ledgers and invoices of the consultants annexed to the SCN replies establishes that the payments were not made to advocates so as to attract RCM. The OIO confirms the demand for alleged 'non-submission of documents' without adverting to the documents already on record, and without any such document being called for at the personal hearing, a finding rendered in complete non-application of mind. V. ENTIRE DEMAND TIME-BARRED: EXTENDED PERIOD WRONGLY INVOKED 8. The Appellant submits that the dispute is purely interpretational taxability and applicability of RCM on specified services. The demand is founded solely on the Appellant's own books and statutory records scrutinised in CERA audit; no positive act of fraud, collusion, wilful mis-statement or suppression with intent to evade is alleged, let alone established. Mere non-payment under a bona fide interpretation cannot....
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....e tax is payable on the said activity. 14.1. We find that the issue involved is no longer res integra as the said issue is squarely covered by the decision of this Tribunal in the case of CST-II, Kolkata v. Anmol Biscuits Ltd., vide Final Order No. 75112/2022 dated 23.02.2022, wherein this Tribunal, on identical agreements of the Appellant's group WB unit, has held that packaging of biscuits paid for on per-quantity basis is a process amounting to 'manufacture' falling in the negative list and accordingly, dismissed the Revenue's appeal. For ready reference, the relevant portion of findings of this Tribunal is reproduced below: "7. The issue to be decided in the present Appeal is whether the activity performed by the contractors appointed by the Respondent is 'Supply of Manpower Services' or is a process amounting to manufacture leading to an exempt service under section 66D of the Finance Act, 1994. 8. We have gone through the agreements entered into with the contractors by the Respondents, relevant portion of which are as below: "The Agent shall carry out packing of biscuits, cakes and cookies. The Agent shall comply with all the procedures, ....
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....ter 19, it is amply clear that the process carried on for the packaging of biscuits into carton boxes is a process which amounts to manufacture and thus the activity carried on by the contractors in regard to the same at the premises of the Respondent has to qualify as a manufacturing process. 10. Reliance in this regard is placed on the judgment of the Hon'ble High Court of Karnataka in the case of UNION OF INDIA Versus KWALITY BISCUITS LTD [2012 (27) S.T.R. 210 (Kar.)] wherein as regards the issue of availment of Cenvat credit of Secondary packaging for biscuits such as Liquid adhesives, BOPP tapes etc., used for affixing labels on cartons in which biscuits were packed, it was held by the Hon'ble High Court that packing preserved quality and taste of biscuits. In that view, assessee was entitled to credit of duty paid on such packaging. Thus, we are of the view that the activity of packaging of biscuits as carried by the contractors is one amounting to manufacture and the same finds a place in negative list of services under section 66D of the Finance Act, 1994 thus making the same an exempted service from levy of service tax." 14.2. We observe that the ratio....