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2023 (8) TMI 1146 - AT - Service TaxLevy of service tax - Manpower Recruitment or Supply Agency Service or not - fabrication of tugs and barges out of raw material like steel plates etc supplied by the clients - HELD THAT:- In the contract, various works contracted with the client shows the labour charges. The Adjudicating Authority has completely mis-understood the term labour charges and concluded that manpower was supplied. In the trade parlance of construction service, there is a term ‘labour charges’ and ‘material cost’. So, wherever there is a term ‘labour charges’ is mentioned that does not mean that manpower supply and it is only service charges without material. Therefore, the entire case made out by the department is under assumption that since ‘labour charge’ is mentioned in the contract it is manpower supply service whereas the Adjudicating Authority has ignored the important aspect of job work i.e. fabrication of barges on the material supplied by the client. This Tribunal has considered this issue in various judgments - reliance can be placed in SA ENGINEERING WORKS VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, VADODARA-II [2023 (6) TMI 699 - CESTAT AHMEDABAD] where it was held that There is no evidence of supply of manpower with details of number and nature of manpower, duration and other conditions for such supply. In absence of such evidence, the job work charges cannot be taxed under “Manpower Recruitment and Supply Agency Service”. Hence, we are of the considered view that the adjudged demand confirmed on the appellant cannot be sustained. Thus, even though manpower was deployed by the service provider but the job is for specific activity such as manufacture, processing etc. and charges is paid on the basis of job and not on the basis of manpower, the activity was held not to be classifiable under Manpower Recruitment or Supply Agency Service. The ratio of the above judgment is directly applicable in the facts of the present case. The entire service tax demand (except the demand of service tax of Rs. 1,05,12,549/-) in respect of repair service) is not sustainable, hence the same is set-aside - Appeal allowed.
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