2023 (4) TMI 547 - AT - Service Tax

Classification of services - manpower recruitment or supply agency service, or not - appellant engaged by the society only for the purpose of unloading of coal from the railway wagons, which was shifted to the coal yard using hired JCBs, Trucks and Tipper Lorries with the help of required labourers for the said services provided such as loading, unloading and stacking of coal, which have been paid by the Society based on the quantum of coal off-loaded and transported - extended period of limitation - HELD THAT - The appellant was in fact paid for the services rendered for transportation of coal in JCBs, Front Loaders or Tipper Lorries from the railway wagons to the coal yard of the Gas Plant on per tonne basis. The above Society has sub-contracted the work to the appellant viz. Shri S. Selvam, who is a lorry transporting contractor and civil contractor. The society has been paid for the services on the basis of the quantity of coal handled. The services provided are unloading of coal from the wagons, its transportation by using JCB front loaders and tipper lorries and its shifting to the specified place in the coal yard for stacking. In our opinion, the above services are definitely not related to either recruitment or supply of labour. Though consignment note was not issued by the appellant for transportation of the coal to be classified as GTA service , the classification of the services provided by him are not under manpower recruitment or supply agency service. The appellant has repeatedly put forth that he has been paid for the services rendered on the basis of quantity of coal handled, by M/s. BHEL Complex Co-operative Labour Contract Society Ltd., Trichy. When specifically asked for an Agreement copy by the appellant with M/s. BHEL Complex Co-operative Labour Contract Society Ltd., the Learned Advocate for the appellant has stated that such a written contract was not entered into - The work that was given to the appellant was for unloading, transportation and stacking of coal from the railway wagons to the coal yard and the documents available in the appeal indicate that there is no agreement for supply of manpower to the recipient of service i.e., M/s. BHEL Complex Co-operative Labour Contract Society Ltd., Trichy. The contract that was awarded to M/s. BHEL Complex Co-operative Labour Contract Society Ltd., which has been executed by the appellant, is relating to the handling and transportation of coal. The services rendered by the appellant cannot be classified under the category of manpower recruitment or supply agency service - As the appeal is allowed on merits, there is no need to discuss regarding the invocability of extended period and justification for imposition of penalties. Appeal allowed.

Summary

Issues involved:
The main issue in this case is whether the services provided by the appellant are classifiable under manpower recruitment or supply agency service.

Summary:

Issue 1: Classification of services under manpower recruitment or supply agency service

The appellant was engaged for unloading, transportation, and stacking of coal, and was paid based on the quantity of coal handled. The documents indicated that there was no agreement for the supply of manpower to the service recipient. The work awarded to the appellant was related to handling and transportation of coal, not recruitment or supply of labor. The Tribunal held that the services provided did not fall under the category of "manpower recruitment or supply agency" service. The appeal was allowed on merits, and the impugned order was set aside.

In this judgment by the Appellate Tribunal CESTAT CHENNAI, the appellant, a lorry transporting and civil contractor, was engaged by a cooperative labor contract society for unloading coal from railway wagons and its transportation to the coal yard. The issue arose when a Show Cause Notice was issued proposing a demand of Service Tax under 'manpower recruitment or supply agency' service. The Order-in-Original confirmed the demand, and the lower appellate authority upheld it. The appellant contended that the services provided were more appropriately classifiable under 'goods transport agency' services. The appellant also argued against the invocation of the extended period for demand of Service Tax, citing a decision by the Principal Bench of the CESTAT at New Delhi. The appellant further sought waiver of penalties under Section 80 of the Act, stating no suppression of facts. The appellant's advocate referred to legal provisions and previous tribunal decisions to support their case.

The Revenue argued that the services provided by the appellant involved the supply of sufficient manpower for unloading and shifting coal, making it fall under 'manpower recruitment or supply agency' service. They contended that since no consignment note was issued by the appellant, the service could not be considered as 'goods transport agency' service. The Tribunal examined the definitions and scope of 'manpower recruitment or supply agency' service under the Finance Act, 1994. It noted that the appellant was paid based on the quantity of coal handled, and there was no agreement for the supply of manpower. The Tribunal found that the services provided were related to handling and transportation of coal, not recruitment or supply of labor. Citing a previous decision by CESTAT Bangalore, the Tribunal held that the services did not fall under 'manpower recruitment or supply agency' service.

In conclusion, the Tribunal allowed the appeal on merits, setting aside the impugned order. The services provided by the appellant were not classified under 'manpower recruitment or supply agency' service. Therefore, there was no need to discuss the invocability of the extended period or the justification for penalties. The appeal was allowed with consequential relief, if any, as per the law.