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TMI Blog2023 (6) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... ices of the Kankhanis / Gang Leaders for cane harvesting. Even the service charges that are payable to these cane harvesting labourers is determined by the farmers in negotiation with the Kankhanis / Gang Leaders. There is nothing on record to suggest that the cane cutting labourers are the employees of the appellant. No employer and employee relationship exists between the appellants and the Kankhanis / Gang Leaders. The labourers are not supplied on per hour or per day basis. Cane harvesting charges are reportedly negotiated with the Kankhanis / Gang Leaders by the farmers themselves. Reportedly, some farmers are not utilizing the services of the appellant for obtaining the labourers. As such, the demand raised on the appellant under manpower supply is not maintainable. In a catena of decisions rendered by the Tribunal Chennai, the issue was decided in favour of the appellants holding that the supply of cane harvesting labourers, in similar facts, would not be falling under the manpower recruitment or supply agency service - reliance can be placed in M/S. ARIGNAR ANNA SUGAR MILLS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, TRICHY [ 2018 (9) TMI 387 - CESTAT CHENNAI] where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account number, the name of the bank are recorded in the records of the Divisional Offices of the factory and thereafter a Harvester Code No., is allotted. As and when the sugar cane cultivated becomes ripe for cutting as per the requirement of the farmers, cane cutting labourers are deployed by the officials of the sugar factory. A consent letter is also obtained from the farmer by the Cane Officer of the appellant, for the engagement of the cane harvest labourers for cane cutting. The consent letter contains the details of the total area to be cut, the name of the sugar cane farmer, code numbers of the cane harvesting labourers, the rates fixed as cutting charge etc. These letters are forwarded to the Accounts Department of the appellant for deduction of the charges for the services of the labourers. From the above, it appears to the Revenue that the agriculturists / farmers have no control over the above cane cutting labourers and they function under the control and supervision of the Cane Officers of the appellant and the labourers enrolled and deployed work under the overall control of the factory. The employer-employee relationship exists between the factory and the can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called as Kankhanis or Gang Leaders . It is submitted that the Kankhanis or Gang Leaders are not employees of the Sugar Mill or Agents of the Sugar Mill, but independent service providers on their own and there is no Master and Servant relationship between the Mill and Kankhanis. They are independent contractors or entities, who are only identified by the Mill for the convenience of the farmers. Farmers alone would fix the cutting charges with the Kankhanis / Gang Leaders through bi-lateral negotiations and the cane cutting charges to be recovered and given to the Kankhanis / Gang Leaders would be informed to the factory. 5.2 It has been submitted by the appellant further that they had not rendered any service; not raised any invoice for any service charges and not received any payment for alleged services. It is also their contention that there was no suppression of facts and the demand is time-barred in the absence of any mens rea, since, there is no master and servant relationship between the Mill and the Kankhanis. 6. During the hearing before the Tribunal, the appellant has submitted that they have not rendered any man-power supply to anyone to attract Service Tax li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his regard is placed on the Board s Circular No.190/9/2015-ST dated 15.12.2015 and the relevant paragraph is extracted below: 1: 2. The matter has been examined. The nature of manpower supply service is quite distinct from the service of job work. The essential characteristics of manpower supply service are that the supplier provides manpower which is at the disposal and temporarily under effective control of the service recipient during the period of contract. Service provider s accountability is only to the extent and quality of manpower. Deployment of manpower normally rests with the service recipient. The value of service has a direct correlation to manpower deployed, i.e., manpower deployed multiplied by the rate. In other words, manpower supplier will charge for supply of manpower even if manpower remains idle. 10. The learned Authorised Representative Smt. K. Komathi (Additional Commissioner) has supported the findings of the lower adjudicating authorities. She has argued that the labourers are registered by the sugar cane factory and are supplied to the farmers for cutting the sugar cane and even the charges are recovered from the cost of the sugar cane s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Arignar Anna Sugar Mills vs. Commissioner of GST Central Excise, Trichy [2019 (26) G.S.T.L. 54 (Tri. Chennai)] is relevant which is extracted below: 6. The demand has been made on manpower supply service alleging that the appellant have supplied manpower to the sugarcane farmers for sugarcane harvesting. The contention of the department that the charges towards supply of cane harvesting labourers are recovered from the farmers at the rate accepted by the farmers and therefore the said activity would be covered within the definition of manpower recruitment or supply agency service under Section 65(68) of the Finance Act, 1994. The appellant has replied to the show cause notice dated 5-4-2011. It is explained by the appellant that there is no employer and employee relationship between the cutting labourers and the appellant. The appellant company has no say in the rate for cutting demanded by the labourers and the labourers have got every right to deny to cut for a particular sugarcane grower. The mill simply manufactures the sugar with regard to the availability of the cutting labourers only. Being a Government undertaking, it can be seen that all appointments are to be ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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