9911796707
TMI Blog2024 (6) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... as to perform the operation of the plant and machineries for processing of raw materials and manufacture of the resultant excisable product i.e. Ferro Chrome and Ferro Manganese. The labour force deployed by the Appellant worked under the direct control and supervision of the Appellant and not under M/s Jindal Steel Limited (JSL). It is very clear that the responsibility of the Appellant under the contract is to operate the plant and machineries for manufacture finished product out of the raw materials belonging to M/s. Jindal Stainless Limited. Thus, the activity performed by the appellant does not qualify as manpower recruitment or supply agency service . The appellant has been paid @ Rs.5.50 per MT. Thus, the consideration paid to the Appellant was on tonnage basis and not on the basis of manpower deployed - the activity performed by the appellant can be categorized as business auxiliary service for the processing / manufacturing of goods for M/s. Jindal Stainless Limited, which is outside the purview of Service tax in terms of Notification No. 8/2005-ST dated 01.03.2005. Accordingly, the demand of service tax confirmed in the impugned order under the category of manpower recrui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials for claiming the abatement as provided under Notification No. 01/2006-ST. Therefore, for the purpose of quantification of duty liability as a subcontractor and under erection, commissioning and installation, the matter is remanded back to the adjudicating authority. Demand of service tax pertaining to accounting error - HELD THAT:- There is no suppression of fact with intention to evade payment of tax established on this count. Accordingly, no penalty imposable on the appellant on this amount and accordingly, the penalty imposed in this regard on the appellant in the impugned order is set aside. Demand restricted for the period after 23.08.2007 - HELD THAT:- The demand of service tax of Rs. 5.97 lakhs confirmed in the impugned order is restricted for the period after 23.08.2007 and the demand, if any, for the period prior to 23.08.2007, is set aside. However, for the purpose of quantification of duty liability as a sub-contractor and under erection, commissioning and installation, the matter is remanded back to the adjudicating authority. Penalty - HELD THAT:- Since the demands of service tax of Rs.53.54 lakhs and Rs.10.77 lakhs set aside, demanding interest or penalty on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , by treating the processing and manufacturing activity as a taxable service under the category of manpower supply, the appellant submits that, the services provided by them to M/s. Jindal Stainless Limited are not classifiable as manpower recruitment and supply service; a perusal of the job orders along with the Flow Chart would demonstrate that nowhere in the agreement it has been mentioned that the contract is meant for supply of manpower. It is submitted that in a manpower supply contract, the supplied manpower would be working under the direct control and supervision of M/s. Jindal Stainless Limited; in the present contracts, it has been specifically mentioned that the appellant has to perform the operation of the plant and machineries for processing of raw materials and manufacture of the resultant excisable product i.e. Ferro Chrome and Ferro Manganese; the predominant purpose as per the Work Orders/contracts is to process the raw materials involving different activities at multiple stages. It is thus submitted by the appellant that the labour force deployed by the Appellant worked under the direct control and supervision of the Appellant and not otherwise and it was the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the demand of service tax of Rs. 5.97 lakhs, on the services rendered by the Appellant as a sub-contractor and other miscellaneous issues, they submit that the Board vide Circular No. 96/7/2007-ST dated 23-8-2007 clarified that the services provided by sub-contractors are liable to service tax even if the main contractor discharge service tax on the gross value. However, it is submitted that the above circular being oppressive in nature for the sub-contractor, would only have prospective effect, as decided by the Hon'ble Supreme Court in the case of Suchitra Components Ltd. v. Commissioner of Central Excise, Guntur [2007 (208) E.L.T. 321 (S.C.)]. Accordingly, they contended that the sub-contractor is also liable to pay service tax while rendering service to the main contractor, but only with effect from 23.08.2007. Reliance in this regard is placed on the decision of Tribunal Kolkata in the case of DTM Construction India Ltd. v. Commissioner [2024 (16) Centax 371 (Tri.-Cal.)]. Accordingly, they contended that the demand confirmed on this count in the impugned order for the period prior to 23.08.2007 is liable to be set aside. 5. The Ld. Authorized Representative for the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. 13. All parameters of operation are to be maintained by the peoples engaged by the contractor. 14. The contractor shall ensure that all equipments are working properly. 15. All safety appliances will be supplied by the contractor 16 Any break down occurs, the same should be informed immediately to concern JSL person. 17. Any shut down requires, the same will be taken after discussion with JSL Engineers 18. It is the responsible of contractor to see people are reliving on man to man basis at the end of the shift. 19. Any other job related to operation of chrome ore feeding circuit directed by JSL Executive is in the scope of the contractor. 7.2. From the Scope of Work reproduced above, we observe that the appellant has to perform the operation of the plant and machineries for processing of raw materials and manufacture of the resultant excisable product i.e. Ferro Chrome and Ferro Manganese. The labour force deployed by the Appellant worked under the direct control and supervision of the Appellant and not under M/s Jindal Steel Limited (JSL). It is very clear that the responsibility of the Appellant under the contract is to operate the plant and machineries for manufacture fini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reproduced below: - 4.6. In the above respect, I observe that the disputed income figure of Rs.4,82,78,070/- for the year 2009-10 was taken as gross receipts by the SCN only from the Balance Sheet and P L A/c. of the noticee for the said year prepared by Parida Mohanty Associates. The figures were certified by Sri Ajay Kumar Nayak, Chattered Accountant of the above firm. In the SCN, vide para 7.1, while quantifying the service tax liability of the noticee, the income figures for the rest of the period i.e. F.Y.2006-07, 2007-08 2008-09 were also taken from the P L A/c. prepared by Parida Mohanty Associates. I observe that the noticee has not disputed to the income figures of F.Y.2006-07, 2007-08 2008-09 whereas it has disputed the figures of 2009-10. The impugned P L A/cs. have been prepared by the Chattered Accountants on the basis of the documents submitted by the noticee and accordingly, the receipt of Rs. 4,82,78,070/- during 2009-10 has been calculated and reflected in the P L by Parida Mohanty Associates. Similarly, the figure of Rs.3,93,23,706/- has been certified as income for 2009-10 by Srikanta Associates basing on whatever information on transaction disclosed by the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount is restricted to the period after 23.08.2007 and the demand, if any, for the period prior to 23.08.2007, is set aside. 10.2. We also observe that the appellant has rendered the services of erection, commissioning and installation and claimed abatement of 67% as provided under Notification No. 01/2006-ST dated 01.03.2006, but the appellant has not furnished any break up figures towards this service rendered. Also, no evidence has been submitted regarding supply of materials for claiming the abatement as provided under Notification No. 01/2006-ST. Therefore, for the purpose of quantification of duty liability as a subcontractor and under erection, commissioning and installation, the matter is remanded back to the adjudicating authority. 11. Regarding the penalty imposed on the appellant, since we have already set aside the demands of service tax of Rs.53.54 lakhs and Rs.10.77 lakhs, demanding interest or penalty on these amounts does not arise. 11.1. Regarding the demand of service tax of Rs.10.65 lakhs, we observe that the demand pertains to accounting error. There is no suppression of fact with intention to evade payment of tax established on this count. Accordingly, we hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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