9911796707
TMI Blog2013 (8) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... vate limited company whose share holders are mainly farmers. They entered into an agreement with M/s. Sanjivini SSK Ltd., for harvesting of sugar cane at the fields of member-farmers and transporting the same to Sanjivini SSK Ltd.'s factory. Remuneration for harvesting and transportation were paid on a tonnage basis i.e per ton of the sugar cane delivered at the factory. The department was of the view that the act of providing harvesting sugar cane and transporting the harvested sugar cane from the farmers' fields to the factory site is classifiable as 'manpower recruitment or supply agency service' and is chargeable to service tax. Accordingly, a show cause notice dated 11/04/2008 was issued to the appellant demanding service tax amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contractors who supply labour for harvesting and for transportation. The appellant-company is coordinating between the sugar factory and the labour contractors for which they receive consideration from the sugar factory towards supervision charges and they discharge service tax liability thereon under the head 'Business Auxiliary Service'. For supply of transportation by means of truck/tractors, etc., the sugar factory pays freight and service tax thereon, whereas for supply of harvesting sugar cane, the appellant pays to the contractor harvesting charges which they get reimbursed from the sugar factory at actual. The activity undertaken by the appellant is harvesting of sugar cane and transporting the same on behalf of the farmers. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat since the appellant is paid by the sugar factory on tonnage basis of the sugar cane delivered irrespective of the number of labour employed and number of vehicles used for transportation; therefore the service rendered cannot be classified under the category of 'Manpower Recruitment or Supply Agency service' and had accordingly dropped the demand. In view of the above, it is pleaded that the demand of service tax under the category of 'manpower recruitment or supply agency service' is not tenable. 3.6 The learned counsel has also submitted copies of bills raised by them on the sugar factory from which it is evident that the charges have been made on per ton basis of the sugar cane delivered and the sugar factory has also paid them serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce' is sustainable in law and he accordingly pleads for dismissing the appeal. 5. We have carefully considered the submissions made by both the sides. We have also perused the agreement entered into between various parties which are available on record. 5.1 From the agreement entered into between the farmer and the sugar factory, the farmer has undertaken to supply sugar cane grown by him in his field to the sugar factory. The agreement also says that the farmer will cut the sugar cane by his own labour and will deliver it at the gate of the sugar factory through his own transport means and arrangement for hiring and transportation will be made by the farmer. The labour required for this work of cutting and transportation will be of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tonnage basis and rates are fixed independently for various activities such (i) tying bundles by cutting and slicing sugar cane and (ii) sugar cane transportation by various modes such bullock-carts, trucks/tractor, labourers (head loads). From these agreements what is evident is that there is no supply of any labour by the appellant to the sugar factory. They are only facilitators between the farmers and the sugar factory. Their work is to ensure that the sugar cane ripe for harvesting are cut and transported to the sugar factory. The labour for the same is provided either by the sugar factory itself or by the labour contractors. The charges involved in sugar cane harvesting is collected by the appellant and distributed to the labour contr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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