TMI Blog2022 (12) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... UMBAI] , the issue is no more res-integra and the demand under Manpower Recruitment and Supply Agency Services is not sustainable. Appeal allowed - decided in favor of appellant. - SERVICE TAX Appeal Nos. 10372, 10434-10437 of 2013-DB - FINAL ORDER NO. A/11858-11862/2022 - Dated:- 6-12-2022 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri K.J. Kinariwala, Consultant and Shri Amal Dave, Advocate for the Appellants Shri Vijay G Iyengar, Superintendent Shri Shri Kalpesh P Shah, Superintendent (Authorised Representatives) for the Revenue. ORDER The common facts in brief in respect of all the appeals are that the appellant have arrangement with the farmers for harvesting and transportation of sugarcane to sugar mills. The appellants while paying the cost of sugarcane to the farmers they deduct the expenses of harvesting and transportation of sugarcane. The case of the department is that such expenses charged to the farmers is liable to service tax under the category of Manpower Recruitment and Supply Agency Services , accordingly the service tax demand was confirmed. Being aggrieved, the appellant filed the present appeals. 2. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants have no arrangement for supply of manpower for harvesting and transportation of sugarcane for supply to sugar mills. It is also the fact that charges were calculated on per ton basis therefore, the number of manpower, man-days or man-hours is not relevant for carrying out the activities of harvesting, transportation etc. The arrangement is job specific and not the manpower specific. In the identical issue, this Tribunal has taken consistent view in the following judgments:- (a) Satara Sahakari Shetu Audyogik Oos Todani Vahtook Society vs. CCE, Kolhapur 5.1 We have also perused the contracts entered into by the appellant-assessees with the sugar factory. A typical contract reads as follows :- For the sugar season 2005-06 Karkhana and Sanstha has agreed that 1. Sanstha will carry out the job of cutting and transportation of sugar-cane of the cane grower members as well as non-members of the Karkhana. 2. Karkhana will pay to the Sanstha the charges of cane cutting and transportation on fortnightly basis. 3. The rates for sugarcane cutting and transportation are decided by the State Govt. and the Karkhana will pay the charges (worked out on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 50.00 2. 9 to 15 km per km per MT Rs. 2.75 3. 16 to 25 km per km per MT Rs. 2.55 4. 26 km per km per MT Rs. 1.65 Commission 20% Other jobs 1. Feeding of sugarcane into mills Rs. 45 per 100 MT 2. Cleaning of transportation vehicles Parking yard Rs. 770 per day 3. Bagasse baling and removal of loose Bagasse Rs. 27 per MT Reloading Rs. l0 per MT Loose bagasse handling Rs. 450 per shift 4. Pressmud handling Rs. 3000 per day 5. Boiler ash removal/hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abour/transport contractors who have undertaken the work of harvesting of sugarcane and transportation of the same. In any service activity, manpower is required. That does not make the service as supply of manpower. Otherwise all services would have to be classified as manpower supply service . Further in the instant case, the consideration is paid not on the basis of supply of manpower but on the quantity of sugarcane delivered on tonnage basis. If an efficient contractor engages less manpower, he will make more profits while an inefficient contractor engaging more manpower would make less profits. In other words, since the consideration is received on the quantity of sugarcane delivered, the essential nature of service is the harvesting and supply of sugarcane. How the service is rendered is not relevant for classification of the service. From the statutory definitions given above and the contracts entered into by the appellants, it is clear that there is no element of manpower supply or recruitment by the appellants to the sugar factory and therefore, the services rendered by the appellants cannot be classified under manpower recruitment or supply agency services, by any stret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner (supra), in the context of contracts of execution of work for loading, unloading, bag stacking and destacking held as under :- 9. On a careful consideration of the above reproduced facts from the entire case papers, we find that the contract which has been given to the appellants is for the execution of the work of loading, unloading, bagging, stacking, destacking, etc. In the entire records, we find that there is no whisper of supply of manpower to the said M/s. Aspin Wall Co. or to the CWC or any other recipient of the services in both these appeals. As can be seen from the reproduced contracts and the invoices issued by the appellants that the entire essence of the contract was an execution of work as understood by the appellants and the recipient of the services. Thus the reasoning adopted by the ld. Commissioner (Appeals) is unassailable and we do not find any infirmity in the said orders. Therefore, Revenue s appeals against the decision of the lower appellate authority is devoid of merits. 6. In view of the above and also following the decisions of this Tribunal in the cases of Amrit Sanjivni Sugarcane Transport Co. Pvt. Ltd., Samarth Sevabhavi Trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have undertaken the activities of harvesting of sugarcane and transporting the same to the sugar factory for which labour is employed. 7. Having regard to the nature of contract between the respondents and sugar factory and the scope of definitions mentioned above, it appears that the Appellate Tribunal has rightly come to the conclusion that the respondent s work, though provided services to the sugar factory, did not come within the mischief of the term Manpower Recruitment or Supply Agency . 8 . This interpretation of agreement between respondents and its principal is in tune with the judgment of Supreme Court in the case of Super Poly Fab-riks Ltd. v. Commissioner of Central Excise, Punjab reported in 2008 (10) S.T.R. 545 (S.C.). Paragraph No. 8 of the said judgment can be relied upon to drag the point at home, which reads as under :- 8. There cannot be any doubt whatsoever that a document has to be read as a whole. The purport and object with which the parties thereto entered into a contract ought to be ascertained only from the terms and conditions thereof. Neither the nomenclature of the document nor any particular activity undertaken by the parties to the contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory definitions given above and the contracts entered into by the appellants, it is clear that there is no element of manpower supply or recruitment by the appellants to the sugar factory and therefore, the services rendered by the appellants cannot be classified under manpower recruitment or supply agency services, by any stretch of imagination. Therefore, the impugned demands by classifying the activity under manpower supply service have to be set aside. 5.2 It is further seen that the activity undertaken by the appellant merits classification under BAS which is defined under Section 65(19) as follows :- business auxiliary service means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production or processing of goods for, or on behalf of, the client; (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was preferred before the first appellate authority. The first appellate authority after following the due process of law came to a conclusion that the services rendered by the appellant would not fall under the category of manpower supply agency service and hence set aside the order-in-original. 4 . We find that the issue is no more res integra inasmuch as this Bench has held in the case of Bhogavati Janseva Trust v. CCE, Kolhapur - 2014 (34) S.T.R. 410 (Tri-Mum) on an identical issue has held in favour of the assessee. The same view was expressed by the Bench in Satara Sahakari Shetu Audyogik Oos Todani Vahtook Society v. CCE, Kolhapur - 2014 (36) S.T.R. 123 (Tri-Mum). It was brought to our notice that identical view was expressed by the Bench in the case of Godavari Khore Cane Transport Company Pvt. Ltd. Central Excise Appeal No. 19 of 2014. The judgment of the Godavari Khore Cane Transport Company Pvt. Ltd. was taken in appeal by the Revenue before the Hon ble High Court of Bombay at Aurangabad. Their Lordships has upheld the order of the Tribunal reported as in Appeal Nos. ST/256/2008, ST/68, 7/2009-Mum. [2012 (26) S.T.R. 310 (Tri-Mum)]. The ratio of the judgment of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were also made taxable in the year 2005. The package deal which is involved in this case was not subjected to service tax in the year 2005 and so, the Revenue was really not able to demand service tax to the respondent. The provisions of Finance Act did not give them sufficient leeway. So the notice and demand was uncalled for. After the notice was issued and the demand was made, it became a difficult endeavour for the Revenue to bring the service provided by the respondent within the definition of Manpower Recruitment and Supply Agency. In our view, it was not possible for them to do so then. Since then much water has flown and now sufficient amendments are made in the relevant provisions. We are told that now all services, except the services mentioned in the negative list are made taxable. Until this provision is made i.e. July, 2012, the situation was different for the Revenue and apparently, the services rendered by the respondent at the relevant time were found not taxable. 5 . In view of the judicial pronouncements on the same issue we do not find any merits in the appeal filed by the Revenue. The appeal filed by the Revenue is rejected. 6 . The cross objection ..... X X X X Extracts X X X X X X X X Extracts X X X X
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