Activity not classifiable under Manpower Recruitment or Supply Agency Service when agreement is for particular job

Naresh K Solnaki Vs C.C.E. & S.T (CESTAT Ahmedabad)

CESTAT Ahmedabad held that when the agreement between the service provider and recipient is for a particular job and not for supply of man power, the activity cannot be classified under ‘Man Power Recruitment or Supply Agency Service’.

Facts- The appellant are engaged in series of activities for their service recipient M/s Intricast Private Limited like breaking the upper cover of shell of castings by pneumatic hammer, and also drilling for removal of upper cover and separating each of the pieces in the welding and reduction of size of scrap pieces, if necessary. These series of activities were to be conducted in the knock out division of M/s Intricast Private Limited and the lump sum of Rs. 2.11 per KG of the castings was paid by M/s Intricast Private Limited to the appellant.

The case of the department in the show cause notice is that the appellant had provided ‘Manpower Recruitment or Supply Agency Service’ to M/s Intricast Private Limited hence, the service tax is leviable on the amount paid to the appellant for these services. The adjudicating authority dropped the proceedings of the show cause notice. Whereas, Commissioner (A) allowed the revenue’s appeal. Being aggrieved, the appellant has preferred the present appeal.

Conclusion- In the case of Divya Enterprises v. CCE, Bangalore wherein the appellant was executing the work of loading, unloading, bagging, stacking etc. on contract basis. In that case also the department was of the view that the appellant was liable to pay service tax under the category of Manpower Supply Services wherein the Tribunal has held that lump- sum work are given to the appellant for execution and this lump-sum work would not fall under the category of providing of service of supply of manpower.

Held that when the agreement between the service provider and recipient is for a particular job and not for supply of man power, the activity cannot be classified under ‘Man Power Recruitment or Supply Agency Service’.

FULL TEXT OF THE CESTAT AHMEDABAD ORDER

The brief facts of the case are that the appellant are engaged in series of activities for their service recipient M/s Intricast Private Limited like breaking the upper cover of shell of castings by pneumatic hammer, and also drilling for removal of upper cover and separating each of the pieces in the welding and reduction of size of scrap pieces, if necessary. These series of activities were to be conducted in the knock out division of M/s Intricast Private Limited and the lump sum of Rs. 2.11 per KG of the castings was paid by M/s Intricast Private Limited to the appellant. The case of the department in the show cause notice is that the appellant had provided ‘Manpower Recruitment or Supply Agency Service’ to M/s Intricast Private Limited hence, the service tax is leviable on the amount paid to the appellant for these services. The adjudicating authority dropped the proceedings of the show cause notice on the ground that the appellant had executed lump sum work/ job and execution of such lump sum work/ job work not covered under ‘Man Power Recruitment or Supply Agency Service’. Being aggrieved by the order-in-original, Revenue filed appeal before the Commissioner (Appeals) who allowed the Revenue’s Appeal and held that the appellant is liable to pay service tax under ‘Man Power Recruitment or Supply Agency Service’. Therefore, the appellant has filed the present appeal.

2. Shri S. Bissa, learned counsel appearing on behalf of the appellant submits that learned Commissioner (Appeals) has committed an error in confirming the service tax liability on the appellant under the category of ‘Man Power Recruitment or Supply Agency Service’ because the appellant has received payment on the quantum of the work performed i.e. quantities of castings on which the wax repairing or assembly work was done, and not on man-hour or man-day basis and therefore, such activities were not in the nature of ‘Man Power Recruitment or Supply Agency Service’. He also referred to the invoices issued by the appellant and the work orders to submit that on the basis of this background the appellant have not provided the ‘Man Power Recruitment or Supply Agency Service’ to M/s Intricast Private Limited. He placed reliance on the following judgments:

• Dhanashree Enterprise 2017 (5) GSTL 212 (T. Mum)
• Talala Taluka Sahakari Khand Udyog Mandali Ltd. 2022 (12) TMI 468
• Ritesh Enterprise – 2010 (18) STR 17 (Tri.-Bang.)
• K. Damodarareddy 2010 (190 STR (593) (Tri. Bang.)
• Divya Enterprise – 2010 (9) STR 370 (Tri. Bang.)
• S.S. Associates 2010 (19) STR 438 (Tri. Bang.)
• CCE vs Samarth Sevabhavi Trust 2016 (41) STR 806 (Bom.)
• Seven Hills Construction 2013 (31) STR 611 J22 (Tri. Mum.)
• Commr. Vs Seven Hills Construction 2017 (7) GSTL J122 (Bom.)

He further submits that the appellate Commissioner himself has decided one appeal of M/s Rajesh C. Pipadia in his favour against the Revenue’s appeal and this order being OIA No. RJT-EXCUS-000-APP-132-14-15 dated 30.07.2014 in the case of M/s Rajesh C. Pipadia who was also an individual who performed the same activities as performed by the appellant herein for M/s Intricast Private Limited. The said Order-in-Original has been accepted by the Revenue and therefore, the Commissioner (Appeals) had no jurisdiction to take a contrary decision while considering the appellant’s appeal involving another individual whose facts were absolutely similar to those involved in this case of M/s Rajesh C. Pipadia. He further submits that the Commissioner (Appeals) had no jurisdiction to hold invocation of the extended period of limitation in this case only because the appellant had not obtained the registration under ‘Man Power Recruitment or Supply Agency Service’ because such lapse on the appellant’s part could not have been held to be an action deliberately taken to avoid paying service tax. He submits that the demand is not sustainable on merit as well on time bar.

3. Shri R.K. Agarwal, learned Superintendent appearing on behalf of the Revenue reiterates the findings of the impugned order.

4. On careful consideration of the submission made by both the sides and perusal of records, we find that there is no dispute that the appellant have provided particular job of wax repairing and assembly department work for M/s Intricast Private Limited. To understand the actual nature of the work and the consideration made by the service recipient it is necessary to go through the work order and invoices which are scanned below:

The relevant clauses of the work order is extracted herein below:

“INTRICASE PVT LTD

STEEL AND ALLOY STEEL

INVESTMENT CASTING MANUFACTIRERS

W.O. NO ITL-002/2011-12 DATE 01.04.2011

TO

Mr Naresh K Solanki

Sarvoday Society,

Opp. Aero cast private limited,

Veraval (Shapar)

Subject: Work order of wax repairing and assembly department work

1. Complete details of the work under the work order After wax injection, all the work related to repairing, assembling and wax preparation and runner making of the injected pattern should be done by wax as per the target and all of them should be kept safely in the right place, housekeeping should be informed during the work.

2. Work order price detail:-

The work done by your department is a part of the company’s scheduled production process and You will be paid for this work order at the rate of Rupees 2.24 (Rupees Two and Twenty Four Paisa) per kg on the quantity of castings produced and dispatched per month through all such combined processes. Among them, TDS as per the rules of Income Tax and any amount which is deductible under the law of the government prevailing at that time will be deducted. The price can be increased or decreased if necessary before the time limit with the agreement of both the company and you.

Terms and Conditions of Work Order

1

2……

3. The labourers, supervisors and any other persons hired by you for the above work shall be your employees/contractors and the company shall not have any responsibility for the same. You will have to comply with all the statutory provisions of the Government and your obligations like payment of provident fund, insurance of employees and other provisions and the company will be fully reserved from any liability in the same.

4. The necessary tools and materials for the work of wax repairing and assembly department will be provided by the company and they will have to be used as per the prescribed standards.

5. According to this work order, you, your hired workers, supervisors and any other persons will not have owner and worker relationship with the owner of our organization.

6………….

7……….

8…………

9………….

10. In case of rejection due to your negligence, the cost of that material will be deducted from your bill.”

In view of the invoice raised by appellant and work order it is absolutely clear that the appellant was assigned a particular job of various activities and the consideration for the same was fixed and paid on per KG basis. As per the terms of the contract, the service recipient has not been given the Man Power, the service recipient is concerned only for a particular processing assigned by them to the appellant, irrespective of nature of man power, quantum of man power. It is also the fact that the recipient of service has no control or supervision on the labour used by the appellant for providing the job. With these facts and the conditions in the work order, it is absolutely clear that the appellant have not provided the ‘Man Power Recruitment or Supply Agency Service’ whereas they have provided the service of ‘Business Auxiliary Service’ i.e. production or processing on behalf of their clients. However, the demand was not proposed under the said head. This issue has been considered in catena of judgments. Some of the judgments cited supra are reproduced below:

• Dhanashree Enterprise vs CCE Pune-I

“5. We find from the show cause notice that though the department has proposed the service of the appellant as classifiable under Manpower Recruitment or Supply Agency service but no evidence was adduced to conclusively hold that the service is of Manpower Recruitment or Supply Agency service. The figure of the service tax was retrieved from the bank account which does not show what is the basis of the service charge by the appellant to the service recipient. Therefore, we do not find any material evidence in the show-cause notice to hold that the appellant are providing Manpower Recruitment or Supply Agency service. On the contrary, the appellant submitted an agreement with the service recipient. The relevant clause of the agreement are reproduced below :-

“This AGREEMENT made at Pune on this 1st day of April month of the year Two Thousand Seven BETWEEN Kalyani Lemmerz Limited incorporated under the Companies Act, 1956 having its office and chief place of business at Kuruli Chakan (hereinafter referred, to as the “Company”) represented by Kalyani Lemmerz Limited, on the one part’ and M/s. Dhanashree Enterprises, a represented by Proprietor (hereinafter referred to as “Contractor”) of the other part.

WHEREAS the company required a contractor for carrying out the work in the premises of the company, which is listed in Annexure “A”.

AND WHEREAS the company accepted the offer of the contractor and in pursuance of the discussions, trial operations were carried out between the period 1st April, 2007 to 31st March, 2008.

AND WHEREAS after discussions and trial operations the company and the contractor agreed to enter into a contract on the same terms and conditions mentioned hereinafter.

NOW THESE PRESENT WITNESSETH AND IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS :-

1] NATURE AND SCOPE OF WORK :

(a) The contractor shall perform the work listed in the Annexure “A” which is part of this agreement and as directed by the concerned officers of the company from time-to-time.

(b) The contractor will be available for the aforesaid Piece work on all working days/shifts and even on holidays if required. He will be carrying out jobs on job order basis and job charges will be paid on piece rate basis.

(c) The contractor will be accountable for required quantum of units to produced within the span of time as be scheduled. He shall ensure that workmen employed by him possess qualification skill and fitness to undertake work of contractor.

(d) The contract does not continue supply of labour as the object or order is for processing/producing the jobs on piece rate basis, using the labour who will be under your control, supervision. Contractor will be responsible for quality problem for which debit for material is issued to you, the material accounting is to given by contractor, so that recording can be done in separate out ward register and contractor payment is subject to material produced and quality, quantity reconciled from time-to-time.

2] PAYMENT :

(a) For performing the work mentioned in clause 1 (Annexure-A) hereinabove the contractor shall be paid at the rates mentioned in Annexure “A” as follows :-

(b) The contractor’s bills for Piece Contract should be submitted on a monthly basis latest by the 3rd of .every month, for the previous month and shall be certified by the Head of the Department/shop, where the contract work was entrusted.

(c) The amounts specified hereinabove are agreed inclusive of all costs, charges, expenses, wages to workmen and any other expenses that may be incurred by the contractor and the contractor shall not be entitled to make any other demands monitory or otherwise whatsoever from the company during the term of agreement.

3] CONTRACTOR’S RESPONSIBILITY :

(a) For performing the above said work the contractor should arrange to sufficient workforce to carry out the task as per requirement time to time.

(b) The contractor shall employ sufficiently experienced person to undertake the supervision of work being carried out by the per piece basis.

(c) The quality and quantity of work at all stages should be as per the standard laid down in Annexure “A”.

(d) The contractor shall ensure that he complies with and observes all the provisions of the Contract Labour (Reg. & Abol.) Act, 1970. The Minimum Wages Act, 1948, Payment of Wages Act, 1936, Employees Provident Fund and Misc. Provisions Act 1952, the E.S.I. Act, 1948:’ and such other statutory encasements, rules and regulations laid down by the Govt. or local body in force/coming into force which may apply to this agreement and any liability on account of non­compliance or violation thereof shall be the contractor’s responsibility.

(e) The workmen employed by the contractor shall be his employees and the company shall be in no way responsible or liable for their wages, salaries, bonus, gratuity, and other allowances, if any.

(f) The contractor shall regularly make payment for P.F. Family Pension, Employees State Insurance Contribution, Deposit Linked Insurance Scheme and all other statutory dues that may become, due and payable by the contractor for the labour employed by him and maintain all such records as may be statutorily required and present the same to the officers of the company when required.

(g) The contractor shall during the term of this agreement, at his cost insure all workmen in his employment and connected with the execution of this contract against all accidents fatal or otherwise, injuries that may be suffered by them and all claims arising there from shall be concluded by the contractor directly.

(h) The contract labour and other supervisory staff engaged by Party No. 2 shall conduct themselves properly while on the premises of the party No. 1 and shall maintain absolute discipline during working hours and Party No. 2 shall ensure that the labour employed by him shall maintain discipline and proper conduct during working hours on the premises of Party No. 1. Party No. 2 shall take such necessary steps to deal with any person employed by him not complying with the terms mentioned in (h) above. He shall also see that recurrence in misconduct or misbehavior of the contract labour is not repeated on the premises of part No. 1.

(i) In the event of contractor is provided or use material and tools belonging to the company, contractor undertakes to return the same in good condition, failing which contractor shall be responsible for the cost, etc.

ANNEXURE-A

CONTRACT DETAILS

DHANSHREE ENTERPRISES

A] NATURE OF WORK

iii. Production Ancillary Associates (Per Piece of Quantity manufactured – Product decided time to time).

iv. All rate are finalized as per the pieces produced (Piece Rate) time to time.

B. SCOPE OF WORK

i To maintain good cleanliness and housekeeping in Factory premises after carrying the piece rate activity.

C. SUPERVISION

i To ensure adequate supervision and control for all above mentioned activities.

6. The identically worded agreement was also entered into by both the appellants with Kalyani. From the reading of the agreement and Annexure A it can be seen that the service is the production ancillary associates and rates for the service is on per piece rate of the pieces produced. Therefore the appellant’s job is not to depute the labour to the service recipient, irrespective of the number of labours, the respondent has to perform the job of producing piece for the service recipient and the rate is on per piece basis. Therefore, the wages/salary or emolument paid to the labour is not relevant to the service recipient. That is the responsibility of the appellant. Against this evidence the department right from show-cause notice up to the Commissioner (Appeals) could not bring any material to show that there is arrangement between the appellants and service recipient there is arrangement of supply of manpower. We also consider the decision of this Tribunal in the case of M/s. Bhagyashree Enterprises & Indl. (supra) wherein identically worded agreement was existing that too with the same service recipient i.e. Kalyani. Hence the identical facts were involved. Therefore the ratio of that decision is squarely applicable in the facts of the present case also. As per our above discussion, we find that since the department could not establish that the service provided by the appellant are of supply of manpower, the demand on the said service is not sustainable. We therefore, set aside the impugned order and allow the appeals.”

• Ritesh enterprises vs CCE Bangalore

“6. We have considered the submissions made at length by both sides and perused the records. The question that arises for consideration is whether the services rendered by the appellants are classifiable under the heading “manpower recruitment & supply agency”?

7. The definition of the manpower recruitment or supply agency under Section 65(105) reads as under :-

“any commercial concern engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to a client.”

The taxable service liable for Service tax is also defined under Section 65(105)(K) which is as under :

“any service provided to a client, by a manpower recruitment or supply agency in relation to the recruitment or supply of manpower, temporarily or otherwise, in any manner.”

From the plain reading of the above reproduced definitions in the Finance Act, 1994, we find that the activity should be providing of any service directly or indirectly in any manner for recruitment or supply of man-power temporarily or otherwise to a client in order to get covered under the said definition. There should be either a recruitment or supply of manpower temporarily or otherwise.

We find from the records that M/s. Aspin Wall & Co. had given the contract as under :

“Work Order No. 005/RE/2004-05 dated 20-11-2004

M/s. Ritesh Enterprises,

Vjaya Mahal

Surathkal 594158.

Dear Sir,

Godown handling operation at our Bagging Plant, Maroli

We refer to work order of even number dated 20-11-2003 and further Discussions had with you on the handling of bulk bagged fertilizers in our Bagging Plant. We have pleasure in awarding you the handling job for a period of further two years as per the following rates, terms and conditions:

1. The rates given above shall be firm without any escalation during the tenure of this work order. However the company reserves its right to extend the same for further period on mutual agreement.”

2. The company is at liberty to enter into parallel contract with any other party, if required.

3. The overall interest of the company should be safeguarded by you and loss/damage to the company due to your negligence/fault shall be recovered from you.

4. Proper accounts of the cargo/empty bags shall have to be furnished to us on completion of each operations.

5. You have to arrange round the clock work in the Plant and keep in touch with our officials, supervisors for better coordination in arrival of bulk prompt standardization etc.,

6. The labour utilized by you for the handling operations under this work order shall be treated as your employees and the company shall have no responsibility whatsoever in this regard. You shall comply with all statutory requirements, government regulations etc. and shall fully indemnify the company against any claims arising as a result of your failure to comply with such formalities.

7. Only 90% of the charges at the maximum will be paid to you for the completed work on weekly basis. The balance shall be released on satisfactory completion of the work shipwise/commodity wise and on your submitting the relevant bills. The company shall deduct 5% from your bills towards security deposit and the same shall be kept in your running account till a total security of 1.5 lakhs is maintained.

8. The Company reserves its right to terminate this work order without assigning any reason by giving you one week’s notice.

Please sign and return duplicate copy of this work order as a token of your acceptance of the rates terms and conditions mentioned hereinabove.”

Contract awarded by Central Warehousing Corporation is as under :

“No. H-700 (22) MLR-RI/2005/6473
Date 28-12-2004
M/s. Ritesh Enterprises
Vijay Mahal,
Suratkal-574158.

Sub : Appointment of H&T contract on adhoc basis at CW. Mangalore – Reg.

Ref: 1. Tender No CWC/BLR/H-700(22)/04 dated 7-10-2004

2. Telegram dated 27-12-2004.

Sir,

Please refer to your tender referred above submitted and opened on 18-10-2004 and negotiations had on 23-12-2004 at this office for adhoc handling and transport contract at Central Warehouse, Mannangudda, Mangalore.

We are pleased to award the contract at the above centre with effect from 1-1-2005 for a period of 3 (three) months with a provision to extend for a further period of three months at the following negotiated rate:-

1. Handling Services, Above Schedule of Rates (Appendix VI) : 162% (one hundred sixty-two percent);

2. Transportation to and from goodshed to Warehouse and vice versa: Rs. 54/- (Rupees fifty four only) per MT ONLY ON POINT TO POINT BASIS.

3. Internal Transportation : Rs. 20/- (rupees twenty only) per MT only on point to point Basis.

You are advised to comply with the following requirements by 31-12-2004 :-

1. Execute an agreement on a stamp paper of appropriate value but not less than Rs. 100/- as per the latest stipulation of Government of Karnataka along with two witnesses to the agreement.

2. The Security Deposit of Rs. 60,000/- (Rupees sixty thousand only) in the form of Demand Draft.

3. Obtain the license under Contract Labour (R&A) Act, 1970 from the concerned – RLC(C)/ALC(C) in case 20 or more labourers are engaged on any day during the tenure of the contract.”

8. As regards the works executed by the appellant M/s. Karwar Dock & Port Labour Cooperative Society Ltd., we find from the records and the documents produced before us that they were intimated about the berthing of vessels at various ports and they were given a lump sum contract for cargo handling i.e. loading and unloading of the goods into the said vessels. We perused the invoices issued by the appellant M/s. Karwar Dock & Port Labour Cooperative Society Ltd., which is annexed at Page Nos. 170 and 171 of the appeal memoranda and noted that the invoices are raised as “cargo handling for granite export loading of Indian rough granite blocks” for a lump sum amount, charged per Metric Tonne.

9. On a careful consideration of the above reproduced facts from the entire case papers, we find that the contract which has been given to the appellants is for the execution of the work of loading, unloading, bagging, stacking destacking etc., In the entire records, we find that there is no whisper of supply manpower to the said M/s. Aspin Wall & Co. or to CWC or any other recipient of the services in both these appeals. As can be seen from the reproduced contracts and the invoices issued by the appellants that the entire essence of the contract was an execution of work as understood by the appellant and the recipient of the services. We find that the Hon’ble Supreme Court in the case of Super Poly Fabriks Ltd. v. CCE, Punjab (supra) in paragraph 8 has specifically laid down the ratio which is as under:

“There cannot be any doubt whatsoever that a document has to be read as a whole. The purport and object with which the parties thereto entered into a contract ought to be ascertained only from the terms and conditions thereof. Neither the nomenclature of the document nor any particular activity undertaken by the parties to the contract would be decisive.”

An identical view was taken up by Hon’ble Supreme Court in the case of State of A.P. v. Kone Elevators India Ltd. (supra) and UOI v. Mahindra and Mahindra in a similar issues. The ratio of all the three judgments of the Hon’ble Supreme Court, is that the tenor of agreement between the parties has to be understood and interpreted on the basis that the said agreement reflected the role of parties. The said ratio applies to the current cases in hand. We find that the entire tenor of the agreement and the purchase orders issued by the appellants’ service recipient clearly indicates the execution of a lump-sum work. In our opinion this lump-sum work would not fall under the category of providing of service of supply of manpower temporarily or otherwise either directly or indirectly.

10. On perusal of the records and the submissions of learned SDR on the Master Circular dated 23-8-2007, we find that the issue is raised at clause 010.02 is as under :

11. It can be seen from the above reproduced portion of the Master Circular that it is in respect of supply of manpower which is engaged for specified period or for completion of particular projects or tasks. The clarification, is in case of supply of man power, it can be seen that the clarification specifically reads that the agency agrees for use of services of an individual to another person for a consideration as supply of manpower. In the cases in hand, there is no agreement for utilization of services of an individual but a job/lump-sum work given to the appellants for execution. The said clarification issued by the Board would be appropriate in the case where services of man power recruitment & supply agency, had been temporarily taken by the Business or the industrial association for supplying of manpower and may/may not be for execution of a specific work. We are of the considered view that the reliance placed by the learned SDR and the learned Commissioner on the circular will not carry the case of the Revenue any further.

12. Accordingly in view of the above findings, we are of the view that the impugned orders are liable to be set aside and we do so. The appeals are allowed with consequential relief if any. Since we have disposed of the appeals on merits itself, no findings are recorded on other submissions made by both sides in these appeals.”

• CCE Aurangabad vs Shri Samarth Sevabhavi Trust

“5. The question between the parties is whether the services would fall within the definition of “Manpower Recruitment or Supply Agency Services”. The definition of this term is mentioned in clause (105)(k) r.w. Section 65(68) of the Finance Act, 1994, which read as under :-

“(105)(k) ”Taxable service” means any service provided or to be provided to any person, by a manpower recruitment or supply agency in relation to the recruitment or supply of manpower, temporarily or otherwise, in any manner”

“65(68) ”manpower recruitment or supply agency” means any person engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person.”

6. In view of provisions of Section 65(68) the “Manpower Recruitment or Supply Agency Services” means any person providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person, and Section 65(105)(k) defines the taxable services for providing such services. From the above definitions, it is rather clear that it envisages supply of labour which can be classified as “Manpower Recruitment or Supply Agency Services”. In the case in hand, there is no supply of labour to the sugar factory concerned. The respondents have undertaken the activities of harvesting of sugarcane and transporting the same to the sugar factory for which labour is employed.

7. Having regard to the nature of contract between the respondents and sugar factory and the scope of definitions mentioned above, it appears that the Appellate Tribunal has rightly come to the conclusion that the respondent’s work, though provided services to the sugar factory, did not come within the mischief of the term “Manpower Recruitment or Supply Agency”.

8. This interpretation of agreement between respondents and its principal is in tune with the judgment of Supreme Court in the case of Super Poly Fab-riks Ltd. v. Commissioner of Central Excise, Punjab reported in 2008 (10) S.T.R. 545 (S.C.). Paragraph No. 8 of the said judgment can be relied upon to drag the point at home, which reads as under :-

“8. There cannot be any doubt whatsoever that a document has to be read as a whole. The purport and object with which the parties thereto entered into a contract ought to be ascertained only from the terms and conditions thereof. Neither the nomenclature of the document nor any particular activity undertaken by the parties to the contract would be decisive.”

9. In view of the above, it is clear that no manpower has been supplied by the respondents to the sugar factory to constitute supply of manpower. This Court had an occasion to deal with the similar issue, as is involved in these appeals, in Central Excise Appeal No. 19 of 2014, and this Court by order dated 27-1-2015 [2015 (38) S.T.R. 468 (Bom.)] has dismissed the said appeal.

10. In view of the above discussion, in our view, the appeals are devoid of any merits. The judgment and orders, which are impugned in these appeals, passed by the learned Member of the Appellate Tribunal calls for no interference. The appeals are hereby dismissed. No costs.”

• Seven Hills Construction vs CST Nagpur

“The appellants are in appeal along with a stay application against the impugned order wherein the Service Tax demand of Rs. 1,68,54,852/- has been confirmed against the appellant along with interest and various penalties under the Finance Act, 1994 under the category of Manpower Recruitment or Supply Agency Services.

2. After hearing both sides, we find that the appeal itself can be disposed of at this stage. Therefore, after granting waiver of the requirement of pre-deposit of Service Tax, interest and penalties, we take the appeal itself for disposal.

3. Brief facts of the case are that the appellants are engaged in providing the service of supply of manpower for running and maintenance of crusher plant and loading of crushed stones in various sizes as required by their clients under an agreement of supply of man power as per rate contract. The appellants have executed the work in lump-sum. The department is of the view that the activity undertaken by the appellants are covered under Manpower Supply Services, therefore impugned demands were confirmed after issuing a show-cause notice to the appellants.

4. On perusal on the case records we find that the appellants are engaged in the activity of crushing of stones and supply the same to their customers as per agreement entered between them on rate contract basis. In the earlier period a similar issue came before the Tribunal in the case of Divya Enterprises v. CCE, Bangalore as reported in 2010 (19) S.T.R. 370 (Tri.-Bang.) wherein the appellant was executing the work of loading, unloading, bagging, stacking etc. on contract basis. In that case also the department was of the view that the appellant was liable to pay service tax under the category of Manpower Supply Services wherein the Tribunal has held that lump-sum work are given to the appellant for execution and this lump-sum work would not fall under the category of providing of service of supply of manpower. Therefore, following the precedent decision in the case of Divya Enterprises (supra), we hold that the activity undertaken by the appellants does not cover by the manpower supply services. Accordingly, we set aside the impugned order and allow the appeal with consequential relief, if any.”

In view of the above judgments which is on the identical issue and the facts involved in the present case, the Tribunal/ High Court has taken a consistent view that when the agreement between the service provider and recipient is for a particular job and not for supply of man power, the activity cannot be classified under ‘Man Power Recruitment or Supply Agency Service’. Moreover, we find that in respect of identically placed assessee Shri Rajesh C. Pipadia, the learned Commissioner (appeals) has dropped the demand vide Order No. OIA No. RJT-EXCUS-000-APP-132-14-15 dated 30.07.2014 and the said order was accepted by the Revenue and no further appeal was filed. This order is also a strong persuasive value in the present case for the reason that in this case also the identical activity was carried out by the assessee for the same service recipient M/s Intricast Private Limited. Therefore, considering the overall facts and the above settled legal position, we are of the view that the demand in the present case is not sustainable. Accordingly, the impugned order is set aside. Appeal is allowed.

(Pronounced in the open court on 12.09.2023)