2013 (7) TMI 299 - AT - Service Tax

Man power supply agency - The appellant is a co-operative society, manufacturing sugar the farmers of the area, after cultivating the crop of sugarcane, are supplying the said sugar cane to the appellant s factory for producing sugar whether the said activity would constitute the man power supply agency supply - Held that - The appellant has arranged only for cutting of sugarcane crop from the field of farmers who are their members further the appellant is charging lumsum amount for the help provided by them for cutting, loading and unloading of sugarcane from the fields of farmers thus the lumsum amount which has been charged by the appellant as for services rendered cannot be classified as man power supply agency as the same has been decided in K. Damodarareddy (supra) and Ritesh Enterprises (2009 (9) TMI 386 - CESTAT, BANGALORE). - Prima facie case is in favor of assessee Stay granted.

Summary

Issues:
Service Tax on man power supply agency services.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD dealt with Stay Petitions against an Order-in-Original regarding the non-payment of Service Tax under the category of man power supply agency services by a cooperative society engaged in sugar manufacturing. The appellant argued that they only charged a lumsum amount for services provided to farmers who supplied sugarcane to their factory, and not for supplying labor. The appellant highlighted previous tribunal decisions supporting their stance that lumsum charges for multiple services cannot be categorized as man power recruitment or supply agency services. The Revenue contended that the appellant had arranged and paid laborers for cutting sugarcane, which fell under man power recruitment and supply agency services.

Upon considering the submissions, the Tribunal observed that the appellant had arranged for cutting sugarcane from farmers' fields and charged a lumsum amount per metric tonne for the services. Referring to previous cases involving similar issues, the Tribunal found that the issue was akin to those cases, where lumsum charges for services were not considered as falling under man power recruitment or supply agency services. The Tribunal noted that the issue seemed to be in favor of the appellant, establishing a prima facie case for waiver of the amounts involved. Consequently, the Tribunal allowed the applications for waiver of pre-deposit of the amounts, staying the recovery until the appeals' disposal.

In conclusion, the Tribunal granted the applications for waiver of pre-deposit of the amounts involved, suspending the recovery until the appeals were resolved. The judgment provided a detailed analysis of the appellant's activities, the nature of charges levied, and the legal interpretation of whether the services provided could be categorized as man power supply agency services, ultimately ruling in favor of the appellant based on previous tribunal decisions and a prima facie case established by the appellant.