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:
