2024 (2) TMI 256 - AT - Service Tax

Levy of service tax - Man Power Recruitment or Supply Agency service (MRSA) - Transportation of goods by road - It is alleged by department that labour (services) was provided by appellant to farmers - HELD THAT - On perusal of records it is seen that the appellant is a Co-operative society formed by farmers. It is alleged by department that labour (services) was provided by appellant to farmers. The appellant has made payment to the farmers on the basis of quantity of sugarcane cut and transported. It is not on the basis of man hours of work. Thus, the payment was made to farmer for harvesting, cutting and transportation of sugarcane. The very same issue was considered in the appellant's own case TALALA TALUKA SAHAKARI KHAND UDYOG MANDALI LIMITED, BILESHWAR KHAND UDHYOG, RANVIRBHAI B MORI, HARIBHAI OGHADBHAI BARAD AND ARJANBHAI KANABHAI DAHIMA VERSUS COMMISSIONER OF CENTRAL EXCISE ST, BHAVNAGAR 2022 (12) TMI 468 - CESTAT AHMEDABAD for different period, and the Tribunal after elaborate discussion has set aside the demand holding that the activity does not fall under MRSA service. The Tribunal in the case of SAMARTH SEVABHAVI TRUST VERSUS COMMISSIONER OF CENTRAL EXCISE, AURANGABAD 2013 (8) TMI 218 - CESTAT MUMBAI and in the case of M/S. ARIGNAR ANNA SUGAR MILLS VERSUS THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, TIRUCHIRAPPALLI 2023 (10) TMI 1047 - CESTAT CHENNAI has taken similar views. The demand of Service Tax under 'Man Power Recruitment and Supply Agency' services cannot be sustained - the impugned order is set aside - appeal allowed.

Summary

Issues involved: Demand of Service Tax under 'Man Power Recruitment or Supply Agency' service (MRSA) for providing labor to farmers for sugarcane cutting and other purposes.

The judgment revolves around the issue of whether the demand of Service Tax under MRSA service is sustainable or not. The appellant, engaged in manufacturing sugar, was alleged to be providing labor services to farmers for sugarcane cutting and other activities. The department contended that the appellant should pay Service Tax for these services provided. However, the appellant argued that the payments made to farmers were for harvesting, cutting, and transportation of sugarcane, not for supplying manpower. The appellant cited previous cases where similar issues were considered, such as in the appellant's own case in 2022 (12) TMI 468 CESTAT Ahmedabad, where the demand was set aside as the activity did not fall under MRSA service. The Tribunal also referred to cases like CC, CE & ST, Aurangabad Vs. M/s. Shri Samarth Sevabhai Trust and M/s. Aringar Anna Sugar Mills Vs. CCE & ST, Tiruchirapalli, where similar views were taken.

After reviewing the facts and evidence presented, and considering the precedents cited, the Tribunal found that the demand of Service Tax under MRSA services cannot be sustained. Therefore, the impugned order was set aside, and the appeal was allowed with consequential reliefs, if any.