2023 (10) TMI 1047 - AT - Service Tax

Levy of Service tax - Manpower recruitment or supply service - recovery of charges from the farmers towards sugarcane cutting and paid the same to labour contractors - HELD THAT - The issue stands squarely covered by the decisions of the Tribunal in the appellants own case for a different period in M/S. ARIGNAR ANNA SUGAR MILLS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, TRICHY 2018 (9) TMI 387 - CESTAT CHENNAI where it was held that The Tribunal on identical set of facts had considered the issue and held that the sugarcane growers themselves are encouraging the harvesting labourers and as a mere facilitation, the amount to be paid to these harvesters are deducted from the price of the sugarcane that is to be paid to the farmers. The Commissioner (Appeals) in a similar set of facts, in the appellant's own case, has set aside the demand. The demand cannot sustain and requires to be set aside - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment include the demand for Service Tax under the category of Manpower Recruitment and Supply Agency Services for the period from April 2011 to March 2012, along with interest and penalties.

Summary:

Issue 1: Service Tax Demand under Manpower Recruitment and Supply Agency Services
The appellants, engaged in the manufacture of Sugar and Molasses, were alleged to have recovered charges from farmers towards sugarcane cutting, which the Department deemed as falling under Manpower Recruitment and Supply Agency Services. The original authority confirmed the demand, interest, and penalties. However, the appellant argued that they merely facilitated farmers to arrange for cane cutting persons, with the cutting charges fully paid by the farmers. Citing various legal precedents, the appellant contended that there was no employer-employee relationship between the cutting laborers and the appellant. The Tribunal, after considering the submissions and relevant case laws, held that the demand cannot sustain and set it aside, allowing the appeal with consequential reliefs.

In conclusion, the judgment by the Appellate Tribunal CESTAT Chennai addressed the issue of Service Tax demand under Manpower Recruitment and Supply Agency Services for the period in question. The Tribunal, after reviewing the facts and legal arguments presented, ruled in favor of the appellant, setting aside the demand and allowing the appeal with consequential reliefs.