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TMI Blog2023 (8) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... fabrication of barges on the material supplied by the client. This Tribunal has considered this issue in various judgments - reliance can be placed in SA ENGINEERING WORKS VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VADODARA-II [ 2023 (6) TMI 699 - CESTAT AHMEDABAD] where it was held that There is no evidence of supply of manpower with details of number and nature of manpower, duration and other conditions for such supply. In absence of such evidence, the job work charges cannot be taxed under Manpower Recruitment and Supply Agency Service . Hence, we are of the considered view that the adjudged demand confirmed on the appellant cannot be sustained. Thus, even though manpower was deployed by the service provider but the job is for specific activity such as manufacture, processing etc. and charges is paid on the basis of job and not on the basis of manpower, the activity was held not to be classifiable under Manpower Recruitment or Supply Agency Service. The ratio of the above judgment is directly applicable in the facts of the present case. The entire service tax demand (except the demand of service tax of Rs. 1,05,12,549/-) in respect of repair service) is not susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (Tri.-Del.) (v) Tiwari Services - 2020 (37) GSTL 57 (Tri.-Mumbai). 3. He further submits that in the show cause notice dated 15.04.2011, out of total demand of Rs. 2,18,63,663/- service tax on the value of Rs. 1,05,12,549/- is related to repair of barges for which the appellant had obtained service tax registration and discharged the service tax. 4. Shri Rajesh Nathan, learned Assistant Commissioner, (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. 5. We have carefully considered the submissions made by both the sides and perused the record. We find that it is the Revenue s case that appellant s activity of manufacturing of tugs and barges is supply of manpower and hence the same is taxable under the category of Manpower Recruitment or Supply Agency Service. To understand the actual arrangement between the appellant and their client, it is necessary to go through the contract entered into by them and the sample invoice, which are reproduced below:- MEMORANDUM OF UNDERSTANDING This memorandum of understanding made on 01 august 2005 between M/s. WORLD OCEAN LIGHTERAGE COMPANY (hereinafter called the 'owner') the party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uipment's (Esab Ferrospeed Electrodes are to used as agreed.) Steering Gear Alignments Labour charges. Piping Labour charges. Water tight door fabrication erection Labour charges. Masonry and Sanitary Labour charges. Painting Labour charges including sand blasting priming. All W T Comnts And F.O. and F.W. tanks Testing Labour charges. Launching Labour charges Inclining Experiment Labour charges. Sea Trail Labour charges. Deflection in keel to be checked frequently to maintain even keel. Carpentry Works, Electrical Works, Piping, Joints and valves are to be tested at site. Hydraulic steering gear Installation piping and testing. Center line of ship to be bisected to get true line on bottom plate as well on deck. All Procedure required for test and samples pieces. Welder qualification procedures as per IRS and Quality assurance plan to be submitted to IRS. Radiographic procedure and facilities to be provided. Hydraulic testing machine for pipes testing. 5 HP Pump and canvas hose pipe as required for Tank Testing. Anchor Windlass installation and testing. Pipes Valves to be tested at site. Delivery of the barge to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a term labour charges is mentioned that does not mean that manpower supply and it is only service charges without material. Therefore, the entire case made out by the department is under assumption that since labour charge is mentioned in the contract it is manpower supply service whereas the Adjudicating Authority has ignored the important aspect of job work i.e. fabrication of barges on the material supplied by the client. The impugned order has traveled completely on wrong interpretation and incorrect footing. 8. We find that on the identical facts, this Tribunal has considered this issue in various judgments and some of the judgments are reproduced below:- (a) In the case of SA Engineering Works vs. CCE ST, Vadodara (supra) the Tribunal held as under:- 6 . We have considered the submission made by both the sides and perused the records. We find that the issue involved in this case is regarding demand of service tax under the category of manpower Recruitment and Supply Services. On perusal of the sample copy of bills and agreement entered into by the appellant with M/s Flexicon Bellows Hoses Pvt. Ltd., it is seen that the amount being paid to the Appellant fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yed by the appellant. Since there is no specific mention about deployment of labour/work force, the services provided by the appellant should not fall under the taxable category of manpower recruitment or supply agency service. Further, the rate contract provided in the work order clearly indicates that the amount shall be paid at a fixed basis i.e. on per kgs /per metric ton basis. Since there is no specific mention about payment of reimbursement of wages and salaries to the workman, the services provided shall not fall under such taxable category of service. 7 . Thus, under the facts and circumstances of this case, it cannot be said that the appellant had provided the Manpower Recruitment and Supply Agency Service. Hence, we are of the considered view that the service tax demands confirmed on the appellant cannot be sustained. 8 . Therefore, we do not find any merits in the impugned order. Accordingly after setting aside the same, we allow the appeal in favour of the appellant with consequential relief as per law. (c) In the case of Shailu Traders vs. CCE, Indore (supra) the Principal Bench of this Tribunal held as under:- 5 . In this case, the appellant had ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, the appellant had supplied/deployed the manpower in the factory premises of its client. Further, the Bill No. 94-95/04, dated 30-6-2004 referred to in the impugned order were towards the charges of handling, finishing activities of mill and production against dispatch quantity of 162.5 mt @ Rs. 135 mt. The appellant has stated the nature of activities under taken by it, which inter alia includes unloading of raw material, movement of raw material to various machines/storage tank as per the requirement of manufacturer process, sorting of raw material/finished goods, cutting of material to required sizes, etc. 5 . Since the essence of contract is execution of the assigned work and control over the workman and supervision was always with the appellant, it cannot be said that the activities undertaken by the appellant falls under the category of Manpower Recruitment or Supply Agency Service , for levy of service tax. Further, the documents available on records show that the service receiver M/s. Super Iron and Steel Ltd. has paid for the lump sum amount for the contract executed by the appellant. Thus, in our considered view the appellant cannot be considered as Manpower Recru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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