2016 (10) TMI 799 - AT - Service Tax

Service tax liability - Manpower Recruitment and Supply Agency service - whether job work undertaken in the premises of M/s. Chaphekar Engineering Pvt. Ltd. is a lumpsum contract, or are to be considered under Manpower Recruitment and Supply Agency service? - Held that - We perused the random invoices which are annexed to the appeal memorandum and find that these invoices did not indicate that they were for supply of labour, though the invoices indicates it is for labour charges only; We find that the invoices indicate that the rate is for job work undertaken on lumpsum basis. The bill statement indicates about painting of vehicles on lumpsum basis and the bill has been settled also after reducing some rejections, which would in our view support the contention of appellant that they are undertaking lumpsum work. Decision in the case of Ritesh Enterprises Versus Commissioner of Central Excise 2009 (10) TMI 182 - CESTAT, BANGALORE relied upon where on the same issue demand under Manpower Recruitment and Supply Agency service was set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Service tax liability on the appellant under the category of Manpower Recruitment and Supply Agency service.

Analysis:
The appeal was directed against a specific order dated 24.01.2011. Despite the appellant's absence, the appeals were taken up for disposal. The interconnected appeals were disposed of by a common order. The Departmental Representative argued that the issue revolved around the service tax liability on the appellant under the Manpower Recruitment and Supply Agency service due to job work undertaken at a client's premises. The appellants contested the demand, claiming the job work was a lumpsum contract. Invoices raised on the client did not explicitly state they were for labor supply, but indicated lumpsum job work rates. The Tribunal referred to a previous case, Ritesh Enterprises, where a similar demand was set aside. The Tribunal found that the judgment in the Ritesh Enterprises case applied to the current situation. Consequently, based on the facts and circumstances, the appeals were allowed, and the impugned orders were set aside.

This judgment primarily dealt with the issue of service tax liability under the Manpower Recruitment and Supply Agency service category. The Departmental Representative argued that the job work undertaken by the appellants at the client's premises should be considered a service falling under this category. However, the appellants contended that the work was a lumpsum contract, supported by the nature of invoices issued. The Tribunal, after examining the invoices and considering the precedent set by the Ritesh Enterprises case, concluded that the demand under the Manpower Recruitment and Supply Agency service should be set aside in this instance as well. The decision was based on the similarity of the issues and the application of the previous judgment's ratio to the current case.