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TMI Blog2018 (8) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of agency service. The audit notes further suggest examination as to whether appellants are within the threshold exemption limit allowed to small service providers etc. It is also seen from records that at the instance of the department, TATA vide their letter dt. 30.5.2008 to the Superintendent of Central Excise, Theni Range submitted copies of statement of accounts for 2005-06, 2006-07 and 2007-08. The service rendered by the appellants are not in the nature of “Manpower Recruitment of Supply Agency Service‟ - Appeal allowed - decided in favor of appellant. - Appeal No. ST/176/2012 - Final Order No. 42252 / 2018 - Dated:- 10-8-2018 - Hon ble Shri Madhu Mohan Damodhar, Member (Technical) And Hon ble Shri P. Dinesha, Member (Judicial) Shri M.S. Srinivasa, Advocate, Shri H.Y. Raju, Advocate For the Appellant Shri B. Balamurugan, AC (AR) For the Respondent ORDER Per Madhu Mohan Damodhar The appellants were holding service tax registration for 'Cargo Handling Service‛. During the audit of accounts of M/s.TATA Coffee Ltd. (TATA, for short), it emerged that appellants were performing certain tasks in the factory of TATA mainly in proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant shall not sub contract any of the aforesaid operations without the permission of TATA. Appellant shall be reimbursed with electricity, water, security charges etc. incurred for undertaking packing operation. Appellant was required to carry out maintenance of machine at their cost. Consideration was paid on per kg basis. Similarly, loading and unloading activity was to be paid on per ton / per truck / container basis. 2.4 The agreement dt. 30.09.2006 on page 89 of the paper book was for maintenance of Effluent Treatment Plant (ETP). The contract was for managing and maintaining the ETP on daily basis in three shift of operations. The agreement refers to appellant as Consultant‛ and makes it incumbent on them to assess quantity of chemicals required, and dose the same most economically for treatment of the effluents. It is agreed upon that the treated effluent should meet with all the norms and standards laid down by Pollution Control Board. Appellant is given responsibility to liaise with the Pollution control Board and assist TATA to obtain all requisite licenses and approvals. It is agreed that all chemicals required for the E.T.P operation will be supplied by TAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty are not sustainable. 3. On the other hand, Ld. A.R Shri B. Balamurugan supports the impugned order. Ld. A.R draws attention to para 5.1 of the impugned order where the adjudicating authority has analyzed the issue and found that the manpower requirement would be informed to appellants for adequate deployment of the work force and that the role played by appellants is only to depute / supply adequate manpower, skilled and unskilled to the premises of TATA / Rajshree to undertake jobs assigned to them for execution‛. He also draws our attention to para 5.2 of the impugned order where the adjudicating authority has held that Cauvery charged and collected service tax from TATA but they did not pay the same to Government account.....‛. 4. Heard both sides and have gone through the facts of the case. 5.1 The period of dispute is June 2005 to March 2010. Manpower Recruitment and Supply Agency Service was made exigible to service tax w.e.f. 7.7.1997. The definition of this service in Section 65 (68) of the Finance Act, 1994 has undergone a number of changes since its inception. However, prior to 16.06.2005 the said service was defined as under : Manp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late forums, in a number of decisions some of which have been relied upon by the Ld. Advocate, have consistently held that even when labourers are supplied to actualize the contracted work but such manpower is not at the disposal or effective control of the service recipient during the period of contract, but with the service provider themselves and consideration paid is not on the basis of number of persons employed but on the basis of work executed, such activity cannot be called as Manpower Recruitment or Supply Agency Service . 5.6 In fact, the CESTAT Chennai Bench of the Tribunal in a recent decision in Indira Industrial Labour Welfare Association Vs CCE ST Chennai 2018 (6) TMI 1363 CESTAT Chennai, also relied upon supra by the Ld. Advocate, relying upon its own earlier decision in the case of A. Malathy Vs CCE Chennai vide Final Order No.40888/2018 dt. 13.3.2018 and also decision of CESTAT Mumbai in Bhagyashree Enterprises - 2017 (3) TMI 786 CESTAT Mumbai has held as under : 5.1 From a perusal of the contracts, two dated 06.08.2005 and one dated 24.08.2005, we find that the works contracted by BHEL to the appellant were Material Handling Contract and Mobile C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant. In our considered view this contract cannot be considered as a contract for supply of manpower to KLL. This, in our considered view is nothing but lumpsum work awarded to appellants by KLL. We find strong force in the contentions put forth by the learned Counsel that the issue is covered by the decision of Divya Enterprises (supra) and Ritesh Enterprises (supra). 5.5 In the event, we find in favour of the appellant. The impugned order cannot then sustain and is therefore set aside. Appeal is therefore allowed with consequential benefits, if any, as per law. 5.7 In the facts of appeal at hand, it is clear from the agreements and communication between the appellants and its service recipient that although there was indeed use of manpower, however that was only for the purpose of actualizing the work contracted to the appellant. This manpower was at all times under the control and superintendence of the appellants. The consideration for the work contracted was dependent upon the extent of work completed or executed and not on the basis of number of manpower supplied. 5.8 Ld. A.R has drawn our attention to the finding of adjudicating authority in para 5.2 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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