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2023 (4) TMI 715 - AT - Service TaxLevy of service tax - Job work - Manpower Supply Agency Service or not - business of transportation of tractors by driving the tractors from the factory of M/s Punjab Tractors Ltd to the premises of dealers - interest - penalty - HELD THAT:- Consideration for the job undertaken by the appellants is on the basis of per kilometer. Letter dated 02.01.2004 written by Punjab Tractors Ltd to the appellants indicates the same. The said letter inter alia requests the appellants to organize drivers as required. It appears that the department has understood the same to be request for supply of the drivers and apparently the department did not consider the other terms of the contract. The terms of the contract were not for supply of the drivers. The appellants had to undertake the transportation of tractors from premises of Punjab Tractors Ltd to their dealers and in the bargain they may appoint drivers for the work. Appellants were required to take all responsibilities on the way - even where the wages of the workers or the employees supplied by the agency are paid by the agency, the liability to pay the service tax would be under said agency and not on the clients. In other words, the Circular clarifies that mere payment of wages by the manpower recruitment or supply agency does not take away their status. However, as far as the facts of the present case are concerned, there are no reasons for applying the said circular; the terms of the contract are very clear and the appellants have rendered the job assigned by Punjab Tractors Ltd and did not at all supply any manpower. There are no hesitation whatsoever in concluding that the job work undertaken by the appellants does not fall under the category of ‘Manpower recruitment or supply agency service’, therefore, the demand confirmed therein are liable to be set aside - Once demand itself is set aside, the penalty and the interest do not survive - appeal allowed.
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