2016 (3) TMI 201 - AT - Service Tax

Liability of Service Tax - Manpower Recruitment or Supply Agency Services - Whether services of cutting, drilling, punching, bending and notching of material on job work basis in the factory of M/s. Amitasha Enterprises Pvt. Ltd., Nagpur provided by the respondent falls under the category of Manpower Recruitment or Supply Agency Services - Held that the identical issue of M/s. Yogesh Fabricators was decided 2015 (8) TMI 1013 - CESTAT MUMBAI in the case of the work undertaken in the same premises of Amitasha Enterprises Pvt. Ltd. So, by relying on the same, the services provided by the appellant do not fall under category of Manpower Recruitment or Supply Agency Services. Therefore, not liable to pay service tax. - Decided against the revenue

Summary

Issues:
- Whether the respondent provided services under Manpower Recruitment or Supply Agency Services category.
- Validity of service tax payment liability.
- Interpretation of the contract between the parties.
- Applicability of judicial pronouncements on similar cases.

Analysis:
1. Service Category Determination:
The main issue in this case was to determine whether the respondent provided services under the Manpower Recruitment or Supply Agency Services category. The Adjudicating Authority initially held the respondent liable for service tax payment due to services provided at the factory of a specific company. However, the first appellate authority disagreed with this decision, leading to the appeal.

2. Judicial Precedents and Interpretation of Contracts:
The Tribunal referred to a previous case involving a similar issue with M/s. Yogesh Fabricators and highlighted the relevance of the findings in that case. The Tribunal emphasized that the nature of the contract and the activities undertaken by the respondent did not constitute supply of manpower services. The Tribunal also considered the interpretation of the contract between the parties and concluded that the services provided were part of the manufacturing activity of the company, exempting them from service tax liability.

3. License Issuance and Legal Interpretation:
The respondent relied on a license issued by the Licensing Officer, Govt. of Maharashtra, which indicated the company as the principal employer. However, the Tribunal determined that this license did not alter the nature of the services provided under the lump sum contract. Citing the case of Seven Hills Construction, the Tribunal reiterated that the activity undertaken did not fall under the Manpower Supply Recruitment Services category.

4. Final Decision:
Considering the previous judicial pronouncements, the Tribunal upheld the impugned order, stating that it was correct, legal, and devoid of any infirmity. The appeal by the revenue was rejected, affirming the decision that the respondent was not liable for service tax payment based on the nature of services provided and the contractual arrangements between the parties.

In conclusion, the judgment favored the respondent, emphasizing the importance of contract interpretation, previous judicial decisions, and the specific nature of services provided in determining service tax liability under the Manpower Recruitment or Supply Agency Services category.