2018 (10) TMI 1553 - AT - Service Tax

Manpower Recruitment and Supply Agency Service - work was related to shifting of Coal from outside coal yard to inside factory, packing of cartons of sugar, repairing at new bagasse yard and certain such other works - Held that - The learned Commissioner (Appeals) has scrutinized the individual contracts and observed that the contracts were for jobs to be completed by the respondent. From the observation of learned Commissioner (Appeals), we note that there was no contract for supply of any fixed number of labours to M/s Simbhaoli Sugar Ltd. and that the contracts were fixed job to be performed in fix time frame. The respondent s responsibility was to get the job completed and it was not merely supply of manpower to M/s Simbhaoli Sugar Ltd. - The only ground of appeal raised by Revenue is that the respondents were responsible to comply with all provisions of law in respect of labours engaged by them. Such condition in a contract does not indicate that such contract is for supply of labours. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the activities undertaken by the respondent constitute "Manpower Recruitment or Supply Agency Service" for the purpose of Service Tax liability.

Detailed Analysis:
The appeal before the Appellate Tribunal CESTAT ALLAHABAD was directed against the Order-In-Appeal passed by the Commissioner (Appeals), Customs & Central Excise, Meerut-II. The case involved the respondent being engaged by a company for various tasks, leading the Revenue to issue a show cause notice demanding Service Tax under the category of "Manpower Recruitment and Supply Agency Service." The Order-In-Original confirmed the demand and penalty, prompting the appellant to appeal. The Commissioner (Appeals) analyzed the works contract and orders issued, concluding that the activities did not fall under the service category in question, citing a previous Tribunal order. The Revenue, however, contended that the terms of the works allotted indicated the respondent's obligation to fulfill labor-related statutory obligations, implying manpower supply.

The Tribunal carefully examined the contentions of both parties and the findings of the Commissioner (Appeals). It noted that the contracts were for specific jobs to be completed within a fixed timeframe, with no provision for supplying a set number of laborers. The responsibility of the respondent was to complete the tasks, not merely supply labor. The Tribunal observed that the ground of appeal by Revenue focused on the respondent's obligation to comply with labor-related laws, which did not necessarily indicate a manpower supply contract. Emphasizing that manpower is naturally required for job completion and labor laws must be adhered to, the Tribunal found no merit in Revenue's argument and upheld the Order-In-Appeal.

In conclusion, the appeal filed by Revenue was dismissed, and the Cross-Objection was also disposed of by the Appellate Tribunal CESTAT ALLAHABAD, with no interference in the impugned Order-In-Appeal.