Ishika Enterprises Vs Commissioner of Central Tax (CESTAT Hyderabad)
CESTAT Hyderabad allowed Ishika Enterprises’ appeal against a service tax demand of Rs. 1,76,612/- with interest and penalty. The appellant had entered into a contract dated 31.03.2009 with Bagga Distilleries Hyderabad Pvt Ltd. for activities including washing, stacking bottles in the godown, and cleaning the washing, bottling, blending and godown areas using the contractor’s manpower.
Revenue alleged that the services constituted manpower supply and were taxable under Section 65(105)(k) of the Finance Act, 1994. A Show Cause Notice dated 30.05.2011 was issued and the demand was confirmed by the adjudicating authority. The Commissioner (Appeals) rejected the appeal for non-compliance with the stay order under Section 35F of the Central Excise Act, 1944. CESTAT subsequently remanded the matter for decision on merits. The impugned order dated 30.12.2013 upheld the original order.
Before CESTAT, the appellant submitted that the contract concerned specified work and payment was based on the number of bottles, rather than supply of manpower. The Tribunal examined the contract and found that it dealt with washing, stacking and cleaning activities using the contractor’s manpower, but did not require the appellant to supply manpower to the distillery. Relying on its decision in Rama Enterprises and the other cited cases, CESTAT held that the issue was no longer res-integra. The appeal was accordingly allowed.
