2023 (6) TMI 699 - AT - Service Tax

Levy of Service Tax - manpower Recruitment and Supply Services - production of bellows on Job work basis for the principal manufacturer Flexican Bellows Hoses Pvt. Limited in the premises of the Principal manufacturer - HELD THAT - On perusal of the sample copy of bills and agreement entered into by the appellant with M/s Flexicon Bellows Hoses Pvt. Ltd. it is seen that the amount being paid to the Appellant for the activity of Job works. M/s Flexicon Bellows Hoses Pvt. Ltd. has entered into agreement with the appellant for manufacture of Flexicon Bellow on job-work basis. The appellant was paid for carrying out such activities. The workmen deployed by the appellant for carrying out such activities were under the supervision and control of the appellant. The ultimate manufacturer who entrusted the job to the appellant was no way concerned with the workmen deployed by the appellant. It is also noticed that over and above paying the amount for manufacturing activities undertaken by the appellant on job-work basis the said service receiver had not paid any specific price to the workmen/ Labour deployed by the appellant. Thus under such circumstances it cannot be said that the appellant had provided the Manpower Recruitment and Supply Agency Service. The documents submitted by the appellant indicate a lump sum charge for the work undertaken by them. There is no evidence of supply of manpower with details of number and nature of manpower duration and other conditions for such supply. In absence of such evidence the job work charges cannot be taxed under Manpower Recruitment and Supply Agency Service - the adjudged demand confirmed on the appellant cannot be sustained. There are merits in the impugned order - appeal allowed.

Summary

Issues:
The appeal challenges the confirmation of service tax demand for the period July 2005 to February 2007 on the grounds of providing manpower/labor supply services without proper registration and payment of service tax.

Summary:
The case involves M/s S.A. Engineering Works appealing against the confirmation of a service tax demand by the Commissioner (Appeals) for the period July 2005 to February 2007. The appellant provided manpower/labor supply services to M/s Flexican Bellows & Hoses Pvt. Ltd. without obtaining service tax registration or paying the due amount. A show cause notice was issued, leading to the demand being confirmed by the adjudication authority and upheld by the Commissioner (Appeals), prompting the appeal.

The appellant argued that they carried out production on a job work basis for Flexican Bellows, using their technicians and materials provided by Flexican. They cited relevant agreements and previous tribunal decisions to support their position.

Upon review, the Tribunal found that the issue revolved around the demand of service tax under the category of manpower recruitment and supply services. Analysis of bills and agreements revealed that the payments to the appellant were for job work activities, not for supplying manpower. The workmen were under the appellant's control, and the service receiver did not pay a specific price for the labor. The lack of evidence supporting the supply of manpower led the Tribunal to conclude that the appellant did not provide manpower recruitment and supply agency services.

Consequently, the Tribunal set aside the impugned order, allowing the appeal and providing any consequential relief as per the law.

Separate Judgment:
No separate judgment was delivered by the judges in this case.