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TMI Blog2014 (12) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... u S & SSS 08/ST/2009 dated 31-12-2009 CCE, Kolhapur 3,03,30,643/- Rajarambapu Patil SSK Ltd. 03 ST/140/10 Sahyadri OUTVYGSS Ltd., l/ST/2009 dated 15-12-2009 CCE, Kolhapur 3,89,76,775/- Sahyadri SSK Ltd. 04 ST/142/10 Shree Chh. Shahu SSOT/VS Ltd. 7/ST/2009 dated 31-12-2009 CCE, Kolhapur 1,90,68,636/- Chh. Shahu SSK Ltd. 05 ST/143/10 Padmabhushan Vasantdada Patil OTVSSM 2/ST/2009 dated 30-12-2009 CCE, Kolhapur 65,89,503/- Chh. Rajaram SSK Ltd. 06 ST/150/10 Sadashivrao Mandlik OTVSM 4/ST/2009 dated 30-12-2009 CCE, Kolhapur 1,09,95,261/- Sadashivrao Mandlik Kagal Tal. SSK Ltd. 07 ST/455/10 CCE, Kolhapur P-II/AV/ 89/2010 dated 18-6-2010 CCE (A), Pune-II 20,29,462/- Kisanveer Satara SSK Ltd. 08 ST/456/10 CCE, Kolhapur P-II/AV/ 93/2010 dated 18-6-2010 CCE (A), Pune-II 24,31,525/- Balasaheb Desai SSK Ltd. 09 ST/464/10 CCE, Pune-II P-II/AV/ 92/2010 dated 5-7-2009 CCE (A), Pune-II 41,45,086/- Cane Agro Energy (I) Ltd. 10 ST/465/10 CCE, Pune-II P-II/AV/ 88/2010 dated 18-6-2009 CCE (A), Pune-II 47,29,741/- Dongrai Sgareshwar SSK Ltd. 11 ST/639/11 CCE,&nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants amount to supply of manpower and therefore, the appellants are liable to discharge service tax on the said activity under the category of "supply of manpower service" on the total consideration received from the sugar factories. Accordingly, notices were issued and demands were confirmed along with interest thereon and penalties were also imposed. Aggrieved by these decisions, the appellants are before us. In respect of the 5 appeals filed by the Revenue, the respondents also undertook harvesting and transportation of sugarcane as described above and the demands for service tax were made under "manpower supply service" by the adjudicating authority against which appeals were filed before the Commissioner (Appeals). The said Commissioner, after examining the contracts/agreements entered into by the respondents came into the conclusion that the activity did not come under the purview of manpower supply but merited classification under "business auxiliary service" and accordingly allowed the appeals. The Revenue is aggrieved of this decision and is in appeal before us. 3. The common submissions made by the ld. Counsel for the appellant-assessees are as follows : 3.1&ems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32/13/CSTB/C-I, dated 2-4-2013, Samarth Sevabhavi Trust v. CCE, Aurangabad vide Order No. A/1158/13/CSTB/C-I, dated 24-5-2013 [2014 (36) S.T.R. 83 (Tri. - Mum.)] and Bhogavati Janseva Trust and Ors. v. CCE, vide Order No. A/1274-1279/13/CSTB/C-I, dated 12-6-2013 [2014 (34) S.T.R. 410 (Tri. - Mum.)] have held that the activities undertaken by the appellants merit classification under BAS and not under supply of manpower service. Accordingly, the ld. Counsel pleads for allowing the appeals. 3.2 In respect of jobs such as bailing of bagasse, handling of sugar, stitching of sugar bags, feeding of sugarcane in the sugar mill, etc., the ld. Counsel submits that the appellant had undertaken these works for which consideration was paid either in terms of tonnage of the material handled or in terms of the quantity of goods handled. This would show that the activity undertaken by the appellant is not supply of manpower. The ld. Counsel also relies on the decisions of this Tribunal in the cases of Ritesh Enterprises v. CCE, Bangalore - 2010 (18) S.T.R. 17 (Tri.-Bang.), Divya Enterprises v. CCE, Mangalore - 2010 (19) S.T.R. 370 (Tri.-Bang.), S.S. Associates v. CCE, Bangalore - 2010 (19) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; For arranging the cane cutting and transportation, the Karkhana will pay the consideration to the Sanstha as and when demanded by the Sanstha. 7. The Sanstha also will carry out the jobs of handling of sugar, feeding of sugarcane in the sugar mill, cleaning of parking yard of vehicles transporting sugarcane, loading/unloading/handling of pressmud, baling of bagasse, handling of loose bagasse, collecting/removing/disposal of boiler ash, supply of wood for burning into the boiler, handling/stacking of compost, disposal of spentwash by spraying on the pressmud, stitching of sugar bags. The rates for the said job will be decided by the Karkhana and Sanstha. 8. The karkhana will retain 15% amount of every bill raised for cane cutting transportation job as well as other jobs as security deposit and will handover to the Sanstha after satisfactory completion of the jobs by the Sanstha. 9. Since Co-operative societies are exempted from stamp duty, the agreement is not done on stamp paper. Sd/- Manager, Sanstha Sd/- Managing Director, Karkhana" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 5.3 As per Section 65(68) of Finance Act, 1994 ' "manpower recruitment or supply agency" means any person engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise to any other person' and the taxable service is defined under Section 65(105)(k) as "service rendered to any person by a manpower recruitment or supply agency in relation to the recruitment or supply of manpower, temporarily or otherwise, in any manner". The appellants are not manpower recruitment agencies as they do not recruit any persons; they also do not supply manpower to the sugar factory. What they have undertaken is harvesting of sugarcane and transportation of the same to the sugar factory. To undertake this work, they have engaged labour/transport contractors who have undertaken the work of harvesting of sugarcane and transportation of the same. In any service activity, manpower is required. That does not make the service as supply of manpower. Otherwise all services would have to be classified as "manpower supply service". Further in the instant case, the consideration is paid not on the basis of supply of manpower but on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs for the client. Sugarcane is an input for the client, the sugar factory, and sugarcane is 'goods'. Though the appellants do not procure these goods, they are rendering a service incidental or ancillary to such procurement and therefore, the activity undertaken by the appellants in harvesting and transporting the goods comes under sub-clause (vii) of Section 65(19). Since the impugned demands have been raised under the category of manpower supply or recruitment agency services, such demands have no legal basis. 5.5 In respect of the appeals filed by the Revenue, the lower appellate authority, after examining the contracts entered into by the respondents, came to the conclusion that the activity undertaken did not amount to "supply of manpower" but came under the category of "business auxiliary service". The ld. lower appellate authority noted that this Tribunal in the case of Ritesh Enterprises v. Commissioner (supra), in the context of contracts of execution of work for loading, unloading, bag stacking and destacking held as under :- "9. On a careful consideration of the above reproduced facts from the entire case papers, we find that the contract which has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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