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2021 (8) TMI 1063 - AT - Service TaxClassification of services - Manpower Supply Service or not - independent contractors undertaking production with their work force - scenario upto period 2012 - HELD THAT - The issue was analysed in the appeals filed earlier by these appellants and the Tribunal in BHAGYASHREE ENTERPRISES, SONAWANE INDUSTRIAL VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I 2017 (3) TMI 786 - CESTAT MUMBAI holding that the activity undertaken by the appellants cannot fall under the category of manpower supply service. The demand for the period prior to 2012 cannot sustain and requires to be set aside - Appeal allowed - decided in favor of appellant.
Issues involved:
Appeal against demand for service tax under 'Manpower Supply Service'. Analysis: The appellants challenged the demand for service tax under 'Manpower Supply Service', contending they were independent contractors, not manpower suppliers. They argued that the agreements with M/s. Tractors and Farm Equipments Ltd. (TAFE) were for job works, not supply of manpower. The Tribunal noted previous judgments in favor of the appellants, emphasizing that the agreements established them as independent contractors responsible for work defects, not suppliers of manpower. The Tribunal highlighted clauses showing the appellants were not engaged in manpower supply. The department's reliance on clause 14 was deemed misconceived, as the agreements did not support the claim of manpower supply. Lack of evidence disproving adherence to the agreements led to the conclusion that the demand lacked legal basis. Citing precedents, the Tribunal set aside the demand for the period pre-2012, ruling in favor of the appellants. The Tribunal's decision was based on a detailed analysis of the agreements and legal precedents. It emphasized the appellants' role as independent contractors for job works, not as suppliers of manpower. The Tribunal scrutinized specific clauses in the agreements to establish the nature of the appellants' responsibilities and relationship with TAFE. It rejected the department's argument based on clause 14, highlighting the absence of evidence contradicting the appellants' status as independent contractors. The Tribunal's reliance on previous judgments and legal principles supported its conclusion to set aside the demand for the pre-2012 period. The decision underscored the importance of contractual terms and factual evidence in determining the nature of services provided, ultimately ruling in favor of the appellants. The Tribunal's analysis focused on the appellants' contractual obligations and the nature of their work relationship with TAFE. By examining key clauses in the agreements and legal precedents, the Tribunal established that the appellants were not engaged in manpower supply services but were independent contractors for job works. The Tribunal highlighted the appellants' responsibility for work defects and the absence of evidence undermining their contractual arrangements. Emphasizing the lack of factual or legal basis for the demand, the Tribunal set aside the orders and allowed the appeals, providing relief to the appellants in line with established legal principles and precedents.
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