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TMI Blog2022 (2) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The decisions of CESTAT relied upon by the appellant in OM ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [ 2016 (10) TMI 1234 - CESTAT MUMBAI ] and BHAGYASHREE ENTERPRISES, SONAWANE INDUSTRIAL VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [ 2017 (3) TMI 786 - CESTAT MUMBAI ] also do not help their submissions as they are fact-specific and based on a reading of the contracts in those cases. In this case, though ostensibly, the agreement contains a provision for payment on the basis of the rates mentioned in Schedule II, the agreement has to be read as a composite whole. On reading the agreement as a whole, it is apparent that the contract is pure and simple a contract for the provision of contract labour. An attempt has been made to camouflage the contract as a contract for job work to avail of the exemption from the payment of service tax. The judgment of the Tribunal does not, in the circumstances, suffer from any error of reasoning. There is no merit in the appeal - Appeal is dismissed. - Civil Appeal No. 313 of 2021 - - - Dated:- 18-2-2022 - Dr Dhananjaya Y Chandrachud And Surya Kant , JJ. For the Appellant : Mr. Tarun Gulati, Senior Advocate Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the show cause notice were based on material collected during the course of an investigation by the Department, indicating that: (i) The appellant had obtained service tax registration under the category of Manpower Recruitment or Supply Agency Service ; (ii) The bills were raised by the appellant on their customers on a monthly basis for providing manpower supply services and service tax was charged thereon; (iii) The supply of manpower services by the appellant conformed to the provisions of the Contract Labour (Regulation and Abolition) Act 1970; (iv) In respect of the services of manpower supplied by the appellant to their customer, namely Sigma, the appellant had charged and paid service tax up to July 2012; (v) From 1 August 2012, based on an agreement dated 1 January 2012, the appellant had termed the service activity as job work with tonnage rates and had not charged and paid service tax, classifying the provision of the said services as business auxiliary services, claiming the benefit of a service tax exemption specified at Serial No. 30(c) of Notification No.25/2012-Service Tax dated 20 June 2012; (vi) The invoices raised by the appellant and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts under the Employees State Insurance Act 1948 and Provident Fund in respect of the employees of the contractor on the appellant. The Tribunal accordingly held that the agreement between the appellant and Sigma is a contract labour agreement executed for the purpose of providing requisite manpower and is not a job work contract to extend the benefit of Notification No.25/2012-Service Tax dated 20 June 2012. B Submissions 8 Mr Tarun Gulati, senior counsel appearing on behalf of the appellant assailed the decision of the Tribunal by urging the following submissions: (i) The Tribunal held that the appellant satisfied the definition of the expression contractor under Section 2(c) of the CLRA; (ii) The definition contained in the CLRA indicates that the expression contractor means: (a) A person who undertakes to produce a given result for the establishment through contract labour; or (b) A person who supplies contract labour in any work. (iii) The former covers a job worker while the latter covers a supplier of manpower. Since the definition of the expression contractor under the CLRA includes within its ambit a job worker, the registration of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aman, Additional Solicitor General submitted that (i) Entry 30(c) of Notification 25/2012-Service Tax dated 20 June 2012 envisages the carrying out of intermediate production process as job-work in relation to any goods on which appropriate duty is payable by the principal manufacturer. (ii) The above provision contemplates carrying out of intermediate production process as job work in relation to any goods on which duty is payable by the principal manufacturer. In other words, it covers a situation where the principal manufacturer pays tax on the value of the final goods which would include the cost of the job work; (iii) The agreements which have been executed by the appellant with Sigma are not for carrying out job work and camouflage the supply of manpower services; (iv) The provisions of the agreements executed by the appellant indicate that appellant is required to cover the supply of manpower services to Sigma as distinct from the performance of job work. The contracts are pure labour contracts in which there is a conspicuous absence of details or specifications pertaining to the work which is to be performed, the output to be generated, and delivery schedules, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the parties that the contractor shall take necessary licence whenever required under the provisions of Contract labour (Regulation Abolition) Act, 1970 and shall submit a copy of the same to the Company. 12. The Contractor shall maintain various records, registers, and shall submit timely returns required under legislation, rules and regulations as applicable to him and his personnel. The contractor shall submit xerox copies of musters vouchers to the company in respect of his personnel. 13. The Contractor indemnifies the Company that he shall bear any burden of whatsoever nature like fees, fines, penalty, damages, rise in wages, HRA, Back-wages etc in respect of his personnel under the provisions of any law. [ ] 16. The Contractor ensures that he will maintain the discipline among his own employees. In case of any misbehavior or misconduct by the personnel engaged by the Contractor, the Contractor shall take proper action against such person, the Company shall not have any right to take such action. In the event if the Contractor docs not take proper action the contract is liable to be terminated without notice. 17. The Contractor shall pay time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.49 1.41 0.00 0.00 14 The submission of the appellant is that under the terms of the CLRA, the definition of the expression contractor covers both a person who undertakes to produce a given result as well as a supplier of manpower service. Hence it is urged that though the appellant has to be registered as a contractor under the CLRA, that is because the appellant falls within the definition of the expression contractor in Section 2(c), as a person who undertakes to produce a given result for the establishment by engaging contract labour. 15 Under the CLRA, the expression contractor is defined to mean: (i) A person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture through contract labour; and (ii) A person who supplies contract labour for any work of the establishment including a sub-contractor. The definition covers, in the latter part, the supply of contract labour for any work of the establishment. But in the first part noted above, it comprehends a person who undertakes to produce a result for the est ..... X X X X Extracts X X X X X X X X Extracts X X X X
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