2015 (10) TMI 629 - AT - Service Tax

Manpower Recruitment and Supply Agency Services - lumpsum contract of carrying out the job in the factory premises - Held that - Activity carried out by the Appellants is part and parcel of the manufacturing activity of Transmission Line Tower, M/s. Amitasha Enterprises Pvt. Ltd. have also admittedly factored in the above expenses incurred towards the activities of the appellants, in their cost of production on which appropriate duty was paid at the time of its clearances from their factory. As pleaded by the appellants, under such circumstances, demanding service tax again on the amount on which Central Excise duty is being paid by M/s. Amitasha Enterprises Pvt. Ltd. is nothing but double taxation. In view of the above legal position, I hold that the case law 2009 (10) TMI 182 - CESTAT, BANGALORE is squarely applicable in the instance case and therefore the impugned Order-in-Original is liable to be quashed. - assessees were given a lumpsum contract of carrying out the job in the factory premises of Amitasha Enterprises. This activity will not be covered under the category of Manpower Supply Recruitment Services - Decided against Revenue.

Summary

Issues:
1. Appeal against Orders-in-Appeal confirming demand for service tax under "Manpower Recruitment and Supply Agency Services."
2. Dispute over categorization of services provided by respondents.
3. Cross-objections filed by respondents against appeals by Revenue.
4. Interpretation of license issued to respondents by Licensing Officer.
5. Application of legal precedent in determining tax liability.

Analysis:
The judgment pertains to appeals challenging Orders-in-Appeal confirming the demand for service tax under the category of "Manpower Recruitment and Supply Agency Services." The Revenue contested the first appellate authority's decision to set aside the demand, arguing that the services provided by the respondents did not fall under the specified category. The first appellate authority, relying on a Tribunal judgment, concluded that no taxable services were rendered by the respondents. The Tribunal examined the facts and found that the respondents had undertaken a job for a lump sum amount, not falling under the category of taxable services. The Tribunal emphasized that the nature of the agreement and the job executed did not involve the supply of manpower, leading to the rejection of Revenue's appeals and cross-objections.

The respondents had filed Cross-objections against the appeals filed by the Revenue, and all the appeals and Cross-objections were disposed of through a common order. The Tribunal carefully analyzed the records and observed that the services provided by the respondents did not align with the definition of "Manpower Supply Recruitment Agency Services." The Tribunal highlighted the importance of considering the entire agreement and the nature of work executed to determine the tax liability accurately. Additionally, the Tribunal referenced a legal precedent to support its decision, emphasizing that the activity undertaken by the respondents was part of the manufacturing process and not subject to double taxation.

Furthermore, the judgment discussed the significance of a license issued to the respondents by the Licensing Officer, emphasizing that it did not alter the nature of services provided. The Tribunal reiterated that the job carried out by the respondents on a lump sum contract basis within the factory premises did not constitute "Manpower Supply Recruitment Services." Drawing from authoritative judicial pronouncements, the Tribunal concluded that the appeals by Revenue lacked merit and were rejected, along with the cross-objections. The judgment highlighted the importance of interpreting agreements comprehensively and considering the specific nature of services provided to determine the applicability of service tax accurately.