9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 592 - AT - Service TaxLevy of Service Tax - Manpower Recruitment or Supply Agency Service (MRSAS) - appellant provided MRSAS for the work of water cooling system pipeline laying to M/s.BHEL, Trichy - received payment from M/s.BHEL Trichy - period January 2011 to March 2011 - HELD THAT - On perusal of the work orders and invoices, it is seen that the contract is for performance of work and not for supply of manpower. This is established from the invoices raised for payment made to the appellant. The payments are for the works executed on tonnage basis / unit basis and not on man hours or per person basis. Similar issue was considered by the Tribunal in the case of COMMISSIONER OF SERVICE TAX-II, KOLKATA VERSUS M/S. ANMOL BISCUITS LIMITED 2022 (3) TMI 105 - CESTAT KOLKATA wherein the Tribunal held In the given case since the contractors are being paid on the basis of quantity packed and not on the basis of number of persons deployed, the same cannot partake the nature of Manpower Supply Service - In the case of DIVYA ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, MANGALORE 2009 (12) TMI 155 - CESTAT, BANGALORE , the Tribunal observed that essence of the contract was for execution of work and not for supply of manpower. After scrutiny of the work orders, the Tribunal observed that the work was for completion of particular projects or tasks and therefore will not fall within the definition of MRSA Service . In the present case, the facts establish that the appellant has obtained work order to execute certain works which are part of the manufacturing activity. The appellants are thus responsible to execute the work. The payment is on tonnage basis / unit rate. Being a contractor for execution of work, the contractor gets to decide the number of persons that have to be engaged for completion of the work whereas, in the case of man power recruitment services, the contract for supply of workers and the payment is on the basis of man hours spent by the employee. The facts in both these appeals establish that the situation is not covered under MRSA Service. The demand cannot sustain - the impugned orders are set aside - Appeal allowed.
Issues involved:
The issue involved in both appeals is whether the appellants are liable to pay service tax under Manpower Recruitment or Supply Agency Service (MRSAS). Appeal filed by Mr. A. Natarajan (ST/4249/2013): The appellant, registered under MRSAS, provided services for water cooling system pipeline laying to M/s.BHEL Trichy and did not discharge service tax. Show cause notice was issued, and after due process, the demand was confirmed by the original authority and Commissioner (Appeals). The appellant argued that the activity involved manufacturing valves on tonnage basis, not covered under MRSAS. Appeal No. ST/42353/2013: M/s.Anand Contractors provided MRSAS for various works at M/s.BHEL Trichy and received payment liable to be taxed under MRSAS. Show cause notice was issued for a demand of Rs.15,85,666/- along with interest and penalty. The original authority and Commissioner (Appeals) confirmed the demand. The appellant argued that the activity was on a unit quantity basis, not per person basis, and relied on relevant judgments. Arguments and Analysis: The appellants argued that the activities were ancillary to manufacturing and not subject to service tax. They also contended that the activities might fall under Business Auxiliary Service (BAS) instead of MRSAS. The department reiterated the findings in the impugned orders. Decision: After examining the work orders and invoices, it was found that the contracts were for work execution, not supply of manpower. Payments were made on tonnage or unit basis, not per person basis. Citing relevant case law, it was established that the essence of the contracts was for work execution, not manpower supply. The Tribunal held that the appellants were responsible for executing work, not providing manpower, and the demand under MRSAS could not sustain. Therefore, the impugned orders were set aside, and the appeals were allowed with consequential reliefs. Separate Judgement: There was no separate judgment delivered by the judges in this case.
|
