8. 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 w 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 direct!} 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 other-wise.
We find from the records that M s Aspin Wall & Co had given the contract as under:
“W.O. No 015/2005-06 dt 9.7.2005
Messrs S.S. Associates. Behind Sharath Baker}’. Surathkal.
Sub: Handling of bulk/ baeseti fertilisers IPL New Go down Bykampady Indl. Area.
We refer to your quotation dt 25/5/05 and further discussions we had in connection with handling fertilisers in the IPL New go down. We are pleased to award you the contract for a period of one year with effect form yesterday the 8th July 2005 as per the rates, terms and conditions mentioned here below.
Particulars Rate per MT
Bulk cargo handling
Guiding the tippers for unloading properly
Sweeping collection in the lorries and Hour,
Filling standardisation and stacking including
Payment of tarrex mamools, socks and gloves
Etc., all inclusive Rs 31.00 per MT
Destacking and loading of bagged cargo on To trucks ~~ Rs 13.00 per MT
High stacking (on actual qty high stacked as
And when required by the management Rs 04.00 per MT
Bale unloading Rs 03.00 per bale
Service charges Agency charges Rs 3.00 per MT
Bagged cargo handling (incoming cargo by rate or road)
Unloading and stacking Rs 13.00. per MT
Destacking and loading Rs 13.00 per MT
Re standardisation of ct bags (on actual qty) Rs 20.00 per MT
Service charges/Agency charges Rs 01.00 per MT
1. The rates given above shall be firm without any escalation during the tenure of this work prier. However the company reserves its right to extend the same for further period on mutual agreement.”
The company is it liberty to enter into parallel contract with any other party, if required. The overall interest of the company should be safeguarded by you and loss/damage to he company due to your negligence/fault shall be recovered from you.
Proper accounts of the cargo/ empty bags shall have to be furnished to us on completion of each operations.
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 standardisation etc..
The labour utilised 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.
All levies, taxes, charges as per statute in connection with this work order shall be borne by you.
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 ship wise/ 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.
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 older as a token of your acceptance of the rates terms and conditions mentioned herein above.”
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 Ms Aspin Wall & Co 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 appellant that the entire essential of the contract was an execution of work as understood by the appellant and the recipient of the services. We find that the Honourable Supreme Court in the case of Super Poly Fabriks Ltd., Vs 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 Honourable Supreme Court in the case of State of AP Vs Kone Elevators(India) Ltd (supra) and UOI Vs Mohindra and Mohindra in a similar issues. The ratio of all the three judgements of the Honourable 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 raised at clause 010.02 is as under:
|Business or industrial organisations engage services of manpower recruitment or supply agencies for temporary supply of manpower which is engaged for a specified period or for completion of particular projects or tasks.
Whether service tax is liable on such service sunder manpower recruitment or supply agency’s services.
|In the case of supply of manpower individuals are contractually employed by the manpower recruitment or supply agency. The agency agrees for use for the services of an individual, employed by him to another person for a consideration.
Employer-employee relationship in such case exists between the agency and the individual and not between the individual and the person who uses the services of the individual.
Such cases are covered within the scope of the definition of the taxable service (section 65(105)(k) and, since they act as supply agency, they fall within the definition of “manpower recruitment or supply agency” (section 65(68) and are liable to service tax.
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 needs 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 utilisation 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, has; been temporarily taken by the Business or the industrial association for supplying of manpower and may not be for execution of a specific work. We arc 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.