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2023 (5) TMI 393 - AT - Service Tax
Classification of services - Manpower Recruitment or Supply Agency service or not - providing specified jobs such as packing, loading and unloading, cleaning etc. at the premises of M/s. Livia - privity of contract - employee-employer relationship - HELD THAT:- A perusal of the labour contract entered into between the appellants and M/s. Livia indicate that M/s. Livia has agreed to pay the contractor on rate contract basis which will be determined from time to time on the basis of the nature of the work executed. Supervision and control over the work of the personnel employed by the contractor shall be with the contractor himself or his representatives, M/s. Livia will not in any manner supervise the work of the employees of the appellants, and the appellants are responsible for all the acts and conduct of the workmen and if any loss, costs should be reimbursed to M/s. Livia - The principal will have the privity of contract with the appellants and he would be giving instructions to the contractor only and would not have anything concerned with the workmen of the appellants and the appellants are free to work anywhere else and also undertake any work provided he remains responsible for execution of the specified jobs entrusted.
A plethora of decisions by various benches of the Tribunal holding that where the contracts provide for payment of services on piece rate basis and where the supervision over the workmen employed remains with the contractors, where the employee-employer relationship exists between the contractor and his workmen supplied, the services are not classifiable under “Manpower recruitment or Supply Agency service”.
Regarding Revenue's reliance on the decision rendered in ADIRAJ MANPOWER SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE PUNE – II [2022 (2) TMI 858 - SUPREME COURT] is not applicable since the same is distinguishable, as the facts involved are different and the issue involved therein was the appropriate classification of the services of the appellant whether under “Job work” or under “Manpower Recruitment or Supply Agency” service. The issue before the Court was whether the appellant is a Job Worker within the meaning of the exemption Notification dated 20.06.2012 or is merely a supplier of contract labour for work of the establishment.
On the basis of a detailed analysis of the contracts entered into and other connected records in these appeals, the tax demands raised under 'Manpower Recruitment or Supply Agency' service cannot sustain and hence, the impugned orders are liable to be set aside - No findings are required to be recorded on the issues of invoking extended period and imposition of penalty - Appeal allowed.