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2023 (6) TMI 592 - AT - Service TaxLevy of Service Tax - Manpower Recruitment or Supply Agency Service (MRSAS) - appellant provided MRSAS for the work of water cooling system pipeline laying to M/s.BHEL, Trichy - received payment from M/s.BHEL Trichy - period January 2011 to March 2011 - HELD THAT:- On perusal of the work orders and invoices, it is seen that the contract is for performance of work and not for supply of manpower. This is established from the invoices raised for payment made to the appellant. The payments are for the works executed on tonnage basis / unit basis and not on man hours or per person basis. Similar issue was considered by the Tribunal in the case of COMMISSIONER OF SERVICE TAX-II, KOLKATA VERSUS M/S. ANMOL BISCUITS LIMITED [2022 (3) TMI 105 - CESTAT KOLKATA] wherein the Tribunal held In the given case since the contractors are being paid on the basis of quantity packed and not on the basis of number of persons deployed, the same cannot partake the nature of ‘Manpower Supply Service’ - In the case of DIVYA ENTERPRISES VERSUS COMMISSIONER OF CENTRAL EXCISE, MANGALORE [2009 (12) TMI 155 - CESTAT, BANGALORE], the Tribunal observed that essence of the contract was for execution of work and not for supply of manpower. After scrutiny of the work orders, the Tribunal observed that the work was for completion of particular projects or tasks and therefore will not fall within the definition of “MRSA Service”. In the present case, the facts establish that the appellant has obtained work order to execute certain works which are part of the manufacturing activity. The appellants are thus responsible to execute the work. The payment is on tonnage basis / unit rate. Being a contractor for execution of work, the contractor gets to decide the number of persons that have to be engaged for completion of the work whereas, in the case of man power recruitment services, the contract for supply of workers and the payment is on the basis of man hours spent by the employee. The facts in both these appeals establish that the situation is not covered under MRSA Service. The demand cannot sustain - the impugned orders are set aside - Appeal allowed.
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