2017 (1) TMI 40 - AT - Service Tax

Manpower supply service - lump-sum work - there is no agreement for utilization of services of an individual ; but the agreement is for carrying out job work or lump-sum work as entrusted to the appellant for execution for example milk packing, butter packing etc. The rate specified is also on a piece rate for example for packing of milk in 200, 500 and 100 Ml packets, the rate was fixed as ₹ 12/- per thousand packets - Held that - reliance placed in the case of Ritesh Enterprises vs. CCE, Bangalore 2009 (10) TMI 182 - CESTAT, BANGALORE , wherein it was held that lump-sum work was not covered under manpower recruitment or supply agency - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Service tax demand on manpower supply services.
2. Interpretation of agreement for service provision.
3. Classification of activities under manpower supply agency.

Analysis:
1. The appeal addressed a service tax demand on the appellant for providing manpower supply services to a specific organization. The Department alleged non-payment of service tax on the amount received from the organization. The Original Authority confirmed the service tax demand, but the Commissioner (Appeals) set aside the demand. The dispute revolved around the service tax liability related to the appellant's services.

2. The appellant's services to the organization included lump-sum job work for the production of milk and milk products and the supply of unskilled labor. The disagreement focused on whether the activities fell under the category of manpower recruitment or supply agency. The Original Authority viewed the activities as falling under this category due to the agreement designating the appellant as a labor contractor supplying laborers. However, the appellant argued that the agreement was for carrying out job work, not for supplying manpower directly.

3. The Commissioner (Appeals) supported the appellant's view by referencing a Tribunal decision in a similar case. The Tribunal's decision emphasized that lump-sum work does not fall under manpower recruitment or supply agency. The Tribunal highlighted the importance of interpreting the agreement's terms and conditions to understand the nature of the services provided. Ultimately, the Tribunal upheld the Commissioner (Appeals)'s decision, dismissing the Revenue's appeal against the impugned order.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the legal reasoning applied in reaching the final decision.