2023 (4) TMI 1133 - AT - Service Tax

Classification of services - Manpower Recruitment and Supply Service or not - contract for job work on per piece basis - HELD THAT - The agreement between the appellant and the service recipient in Gujarati language has been produced by the appellant as Exhibit F - A perusal of the bills shows that the amount collected is calculated on the basis of some quantity however, the rate column has been left blank. The contract submitted by the appellant in the appeal memorandum also does not contain any rate list attached with the said contract. In this background it is not possible to verify if the bills raised by the appellant are on per piece basis. Unless the contract is for supply of manpower, the charge of provision of service under manpower recruitment and supply service cannot be made. A perusal of the bills and the contract submitted by the appellant does not make it clear how the bills have been raised. The bills as well as contract are in Gujarati language. The contract does not contain any per piece rate chart. Matter remanded back to the original adjudicating authority. The adjudicating authority can examine how the bills have been raised - appeals are allowed by way of remand to the original adjudicating authority.

Summary

Issues involved:
The appeal involves a demand for service tax under the category of 'Manpower Supply Service' by appellants claiming their services were for job work on a per piece basis, not qualifying as 'Manpower Supply Service'.

Comprehensive Details:

Issue 1: Nature of Services Provided
The appellants argued that the services provided were not 'Manpower Supply Service' as they were based on job work on a per piece basis, with the hired manpower working under the contractor's control, not the service recipient's control. The payment received was for work performed, not based on the number of people employed. The labor bills submitted by the appellant showed columns for Serial Number, Particulars, Quantity, Rate, and Amount.

Issue 2: Legal Arguments
The Authorized Representative contended that all jobs undertaken by the appellants constituted manpower supply services, even if done on a per piece basis. The nature of service was deemed as 'Manpower Recruitment and Supply Service', making the appellants liable for service tax under this category.

Issue 3: Examination of Agreement and Bills
The agreement between the appellant and the service recipient, produced in Gujarati language, outlined the terms of work to be performed, employee hiring responsibility, and work details. However, the agreement lacked a rate list. The bills raised by the appellant were calculated based on quantity, with the rate column left blank, making it unclear if they were on a per piece basis.

Issue 4: Legal Precedents
The appellants relied on legal cases to support their claim, including judgments highlighting the need for a clear understanding of the nature of the services provided and the absence of labor supply to constitute 'Manpower Recruitment or Supply Agency Services'.

Final Decision
Considering the lack of clarity in the bills and agreement regarding the basis of billing and absence of a rate list, the impugned order was set aside. The matter was remanded to the original adjudicating authority to examine how bills were raised. If on a per piece basis, following legal precedents, the demand would be set aside; if based on the number of persons supplied, the demand may be confirmed under 'Manpower Recruitment and Supply Services'. The appeals were allowed for remand with these observations.