Mahendrapal & Co. Vs C.C. E. & S.T. (CESTAT Ahmedabad)
The appellants have claimed that the services provided by them do not qualify as ‘Manpower Supply Service’ as it was a contract for job work on per piece basis. It has been argued that the appellants were providing services to M/s Mars Forge Private Limited. The appellants had raised the bill towards labour charges for the activity of inspection, loading and dispatch, production, cutting, short blasting, security guards, gardening etc.
It was argued that the manpower hired by the contractor was working under the control of contractor and was not under the control of service recipient. The payment received by the appellant was based on the work performed and was not related to number of people employed for the said work.
Learned Authorized Representative relied on the impugned order. He argued that all the jobs undertaken by the appellant are in the nature of manpower supply. He argued that even if the jobs are done at per piece basis, still the nature of service is ‘Man Power Supply Service’ and therefore, the appellants are liable for service tax under the category of ‘Manpower Recruitment and Supply Service’.
CESTAT held that unless the contract is for supply of manpower, the charge of provision of service under manpower recruitment and supply service cannot be made. A perusal of the bills and the contract submitted by the appellant does not make it clear how the bills have been raised. The bills as well as contract are in Gujarati language. The contract does not contain any per piece rate chart.
In this background, we are constrained to set aside the impugned order and remand the matter back to the original adjudicating authority. The adjudicating authority can examine how the bills have been raised. If the bills have been raised on per piece basis, then following the decision of Hon’ble Bombay High Court in the case of Shri Samarth Sevabhavi Trust (supra), the demand will be set aside.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These appeals have been filed by Mahendrapal & Co., Changela Prasud Popatbhai, Gorakh Sukhai Yadav and Omprakash Ramjugan against demand of service tax under the category of ‘Manpower Supply Service’. The appellants have claimed that the services provided by them do not qualify as ‘Manpower Supply Service’ as it was a contract for job work on per piece basis. It has been argued that the appellants were providing services to M/s Mars Forge Private Limited. The appellants had raised the bill towards labour charges for the activity of inspection, loading and dispatch, production, cutting, short blasting, security guards, gardening etc.
2. It was argued that the manpower hired by the contractor was working under the control of contractor and was not under the control of service recipient. The payment received by the appellant was based on the work performed and was not related to number of people employed for the said work. In support of his claim, the appellant produced certain labour bills. In the labour bills, it is seen that the columns are Serial Number, Particulars, Quantity, Rate and Amount.
2.1 The appellant has relied on the following case law:
