Case Law Details
Adiraj Manpower Services Pvt. Ltd. Vs Commissioner of Central Excise (Supreme Court)
The appellant has sought the benefit of Notification No. 25/2012-Service Tax dated 20 June 2012. Under the terms of the notification, the Central Government exempted certain taxable services from the whole of the service tax leviable under Section 66(B) of the Finance Act 1994.
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.
The substratum of the agreement between the appellant and Sigma deals with the regulation of the manpower which is supplied by the appellant in his capacity as a contractor. The fact that the appellant is not a job worker is evident from a conspicuous absence in the agreement of crucial contractual terms which would have been found had it been a true contract for the provision of job work in terms of Para 30(c) of the exemption notification.
The decisions of CESTAT relied upon by the appellant 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.
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