2018 (2) TMI 1120 - AT - Service Tax

Taxability - manpower supply and recruitment agency services - Held that - the respondent was awarded specific jobs and not the supplies of labour and the consideration paid for such specific jobs was based upon per piece and not on salary basis to the employees/labour utilized for such activity - appeal dismissed - decided against Revenue.

Summary

Issues:
Taxability of amount received for manpower supply and recruitment agency services.

Analysis:
The appeal was filed by the Revenue against an order-in-appeal dated 20.11.2013 regarding the taxability of the amount received by the respondent for providing manpower supply and recruitment agency services to various sugar factories. The learned departmental representative argued that the respondent supplied manpower to the sugar factories and should be liable to pay service tax for the period between October 2005 to December 2010. The adjudicating authority had confirmed the demands, but the first appellate authority dropped the same, citing the respondent's argument that they were carrying out specific jobs with the help of labor based on purchase orders and job-specific considerations. The first appellate authority referred to various case laws and decided in favor of the respondent, stating that the consideration paid was for specific jobs and not for the supply of labor on a salary basis.

The Tribunal, after careful consideration of the submissions and records, found that the first appellate authority was correct in setting aside the impugned order. It was observed that the respondent was awarded specific jobs, not just supplying labor, and the consideration was based on per piece for the work done, not on a salary basis for the employees/labor utilized. The Tribunal concluded that there was no reason to interfere with the reasoned order passed by the first appellate authority, which relied on various decisions on similar issues. Therefore, the Tribunal held that the impugned order was correct, legal, and free from any legal infirmity.

In conclusion, the Tribunal upheld the decision of the first appellate authority, ruling in favor of the respondent and determining that the amount received for specific job contracts was not taxable as manpower supply services. The judgment provided a detailed analysis of the case, considering the arguments presented by the Revenue and the respondent, as well as referencing relevant case laws to support the final decision.