2014 (7) TMI 116 - AT - Service Tax

Demand of service tax - Manpower Recruitment Service or not - agreement with their principal to do certain work with the help of their assurance of production of big mill and small mill and the payment of the same is to be made per Metric Ton. - Held that - As per the agreement the appellant are to do certain activity at the premises of their principals and remuneration towards their services are to be paid as per the work executed and as not per the labour supplied. Therefore as per the decision of Ritesh Enterpries (2009 (10) TMI 182 - CESTAT BANGALORE) wherein this Tribunal has held that contracts for execution of work of loading unloading bagging stacking and destacking in terms of the agreement the payment is to be made for lump sum work not as per the labour supplied. In these circumstances the demand under the Manpower Recruitment service is not sustainable. As observed by us in this case also the remuneration of the work done by the appellant are to be paid as per the work done in lump sum and not as per labour supplied. In these circumstances the demand under the category of Manpower Recruitment and Supply Agency Service does not sustain - Decided in favour of assessee.

Summary

Issues:
Appeal against service tax demand under Manpower Recruitment Service category.

Analysis:
The appellants contested service tax demands under the Manpower Recruitment Service category. The Tribunal disposed of both appeals together due to common issues and facts. The appellants had agreements with their principal for certain work, paid service tax on the amounts, and were accused by the Revenue of falling under the Manpower Recruitment and Supply Agency Service category. The consultant argued that the appellants did not fall under this category, citing precedents. The Revenue countered that the appellants admitted their liability. After hearing both sides, the Tribunal examined the agreements and noted that the remuneration was for work done, not labor supplied, following a precedent. The Tribunal found the demand under the Manpower Recruitment Service category unsustainable, as the remuneration was for lump sum work, not labor supplied. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief.