2016 (1) TMI 621 - AT - Service Tax

Job Work - Hamali work at sugar warehouse for the sugar factory - Nature of services - Manpower Recruitment and Supply Agency Services or Not - Consideration which has to be paid to the appellant is based upon the quantum of work completed and does not indicate any supply of labourers to the sugar factory. - The contract also talks about stitching of sugar bags after transferring the sugar from torn bags of sugar. - Held that - services rendered by the appellant-assessees do not come under the purview of manpower recruitment or supply service and hence the impugned service tax demands are not sustainable in law. Similarly in the case of other jobs undertaken such as handling of sugarcane or sugar or cleaning or removal of boiler ash stitching of sugar bags etc. undertaken by the appellants these activities also do not come within the purview of Manpower Recruitment or Supply Agency service - Decision in the cases of SATARA SAHAKARI SHETU AUDYOGIK OOS TODANI VAHTOOK SOCIETY 2014 (12) TMI 42 - CESTAT MUMBAI Ritesh Enterprises 2009 (10) TMI 182 - CESTAT BANGALORE followed - Demand set aside - Decided in favor of assessee

Summary

Issues:
Interpretation of service tax liability for services provided by a Hamali contractor at a sugar warehouse.

Analysis:
The appeal in question pertains to a Hamali contractor engaged in providing services at a sugar warehouse for a sugar factory. The dispute revolves around whether the services provided are liable to be taxed under 'Manpower Recruitment and Supply Agency Services'. The revenue authorities contended that the amount received by the appellant for services rendered during a specific period should be taxed under this category. However, the appellant argued that the contract with the sugar factory was a lump sum contract based on the quantum of work completed and did not involve the supply of laborers. The contract also mentioned activities like stitching sugar bags, indicating a different nature of work. The Tribunal examined the contract and ledger accounts provided by the appellant and concluded that the services did not fall under the category of manpower recruitment or supply agency, citing a previous judgment for support.

The Tribunal referenced a previous case where it was established that the activity undertaken by the appellant did not amount to 'supply of manpower' but rather fell under 'business auxiliary service'. The Tribunal emphasized that the essence of the contract was the execution of work such as loading, unloading, bag stacking, and destacking, with no indication of manpower supply. The Tribunal upheld the lower appellate authority's decision, stating that the revenue's appeals lacked merit. Additionally, the Tribunal relied on its previous decisions in other cases to support its finding that the services provided by the appellant did not qualify as 'manpower recruitment or supply service', leading to the dismissal of the service tax demands.

In light of the above analysis and the precedents cited, the Tribunal held that the impugned order was unsustainable and set it aside, allowing the appeal with consequential relief. The decision was made based on the nature of the services provided by the appellant, which did not align with the definition of 'Manpower Recruitment or Supply Agency service'. The Tribunal's ruling was in favor of the appellant, highlighting that the services rendered, including handling sugarcane, sugar, cleaning, and stitching sugar bags, did not fall under the purview of the aforementioned service category as established in various previous cases.

In conclusion, the Tribunal allowed the appeal, emphasizing that the services provided by the appellant did not constitute 'manpower recruitment or supply service', thereby rejecting the service tax demands and setting aside the impugned order. The judgment provided a detailed analysis of the contractual terms, nature of work, and relevant legal precedents to support the decision in favor of the appellant.