TMI Blog2023 (12) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... be in any case to be treated as supply of manpower. In the present case the demand has been made during the services received as Manpower Supply Services. On perusal of the documents and invoices it is found that in none of invoice has service tax of 25% for the supply of Manpower Services as required by the above notification has been paid by the service provider. The demand of 75% has been made by the recipient of the service. It is not available anywhere on the record whether any notices or any demands have been issued to the service provider, in terms of notification for payment of 25% of service tax for Supply of Manpower Services. The present services do not qualify as Manpower Supply Service, as it is associated with supply of material also, it is a work contract service which has been defined by Section 65 (54) of the Finance Act, 1994 as amended by Finance Act, 2012. In respect of the Works Contract Services the charge of service tax is on the service provider and not on the service recipient in terms of the above provisions. Accordingly, the demands made by the revenue by invoking the provisions of Section 68 (2) do not stand in the test of law. Accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/-(Rupees Ten Thousand only) upon M/s U.P State Bridge Corporation Limited, 218, PWD Colony, Civil Lines, Meerut under Section 77 of the Finance Act. 1944. 2.1 Appellant is registered for payment of service tax under Reverse Charge Mechanism on taxable services namely Goods Transport Agency Service and Rent-a-Cab Operator Service as per provisions of Section 68 of Finance Act, 1994 read with Notification No. 30/2012-ST dated 20.06.2012. 2.2 Acting on information that appellant is engaged in construction of bridges and in process have received taxable services namely Supply of Manpower by way of contractual labour from various contractors for performing different activities like shuttering, fixing removal; pouring of concrete; curing; reinforcement steel cutting bending and placement; shifting of material; TSA/GSA work; Security services, Legal Services, and Renting of Motor vehicle designed to carry passengers etc., did not discharge the service ta liability under partial reverse charge mechanism as stipulated under Section 68 (2) of the Finance Act, 1994 read with Notification No 30/2012-ST dated 20.06.2012, an enquiry was initiated against them and they were asked t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inety Five Only), involved on Supply of Manpower Service and Security Service, under reverse charge mentioned at SI. No. (i) above; VIII. Penalty should not be imposed upon them under Section 78 of the Finance Act, 1994 for non-payment of Service tax amounting to Rs. 14,628/- (Rupees Fourteen Thousand Six Hundred Twenty Eight Only) on legal services, and Rs. 25,400/- (Rupees twenty Five Thousand Four Hundred Only) on renting of motor vehicles designed to carry passengers service under reverse charge mentioned at Sl. No. (ii) (iii) above respectively. IX. An amount of Rs. 1317/- deposited by them as penalty against short payment of service tax of Rs. 14,628/- (Rupees Fourteen Thousand Six Hundred Twenty Eight Only) on legal services and an amount of Rs. 3,810/- against short payment of service tax of Rs. 25,400/- (Rupees twenty Five Thousand Four Hundred Only) on renting of motor vehicles designed to carry passengers service, both deposited in terms of newly inserted clause (i) of second proviso. to Section 78(1) of the Finance Act, 1994, should not be appropriated; X. Penalty should not be imposed upon them under sections 77 of the Finance Act, 1994 for the contrav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r had admitted that they have sufficient technical staff and labour with them. He has also categorically stated that the contractual labour is procured for activities like pouring of concrete, shuttering and centering, reinforcement, local shuttering, etc. The above is correctly stated inasmuch as the contractual labour was engaged for construction under technical supervision to ensure quality assurance only in disputed activities which by nature of work is a specialized job on which UPSBCL cannot compromise. The administrative control of undertaking the work was not under the control of the Engineers. The control was only to see the quality of the work. The general terms and conditions of measurement of bills are strictly on the basis of measurement compacted duly verified by the site engineer and payment thereof such on bill basis alone. These contracts are not for man power supply. Both the Original Authority and the Appellate Authority have not considered the above facts of the case in proper and judicious manner. Further, he relies upon the following decisions:- o Ritesh Enterprises Vs CCE, Banglore 2010 (18) STR 17 (Tri.) o Samarth Sevabhavi Trust Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.4 I have gone through the findings of the adjudicating authority and find that the adjudicating authority has categorically discussed the issue of supply of manpower in detail and also analysed all the documents, referred by the appellant in the grounds of appeal now and its reply dated 23.11.2016 submitted to the adjudicating authority at the time adjudication of the case, before holding that the appellant had received supply of manpower as defined under Rule 2(g) of Service Tax Rules, 1994. I reproduce the relevant Para of the order below- 17. ----------------------- I have gone through the case records viz. information filed by the party vide their letter dated 20.10.2014 containing information regarding Name of firm, PAN No., Income Tax for the year, Total Work done amount and nature of work. As per information, the party had made payments to contractors who were mainly proprietorship or partnership concern for performing various activities including pouring of concrete, shuttering fixing and removal, curing, reinforcement steel cutting, bending and placement, shifting of material, TSA / GSA work and security; the work related (i) Pouring of Concrete, (ii) Shutter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admittance of the party in their letter dated 20.10.2014 and affirmed by Sh.Vinod Kumar Singh, Assistant Engineer in his statement dated 12.02.2015, I find that the party had procured labour through petty contractors and got the work completed under the supervision and control of their technical staff. Therefore, services provided by the said contractors fall under the category of supply of manpower as defined under Rule 2(g) of the Service Tax Rules, 1994 . 7.5 From the above, it is clear that the appellant's plea that the adjudicating authority had not considered the agreement/contracts they entered into with different contractors is factually incorrect. It is matter of fact that in the Government Sector any job/work is assigned to any contractor after following due procedure of tendering and awarding contracts for each work. The appellant has also agreed upon on this issue. Thus, if the appellant, being a Government Undertaking, had awarded any work contract/job to any of the contractors having proprietorship or partnership concerns related to nature of work pointed out in the SCN i.e. pouring of concrete, shuttering fixing and removal, curing, reinforcement steel cutti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 994 had admitted that the company has sufficient number of technical staff, labour and massions but on requirement they procure labour from outside for getting certain works done and the activities namely pouring of concrete, shuttering centring, reinforcement work, local shifting of shuttering centring are purely labour based and completed under the supervision of their technical staff. 7.8 Thus, in view of the above, I find that the work of pouring of concrete, shuttering centring, reinforcement work, local shifting of shuttering centring were got completed by the appellant by way of procurement of labour through individual contractors under the superintendence and control of their technical staff. Hence, providing of labour by the individual contractors fall under the category of services namely supply of manpower in terms of Rule 2(g) of Service tax Rules, 1994 and remuneration paid in the form of per SQFT/CFT etc could not change the nature of services actually provided. Since the appellant had received supply of manpower through individual contractors as is also evident from the ledger account submitted by the party vide their letter dated 20.10.2014, they are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retion of UPSBC. The work is tto be done for all leads and lifts for supply of material. 3. Contractors bidding for material supply should have valid registration in the UP Sales Tax Department/VAT. 4. Contractor should quote his rates in the BOQ. The rates quoted by the contractor should be inclusive of all forest taxes, octroi, toll tax, Royalty, VAT and transportation charges. 5. ---------------- 6. ------------------- 7. ----------------------- 8. In case of tenders for supply of aggregate preference shall be given to contractors/suppliers who are Crusher owners and screening plant owners. 9. The measurement of work done by the site engineer or established by UPSBC shall be acceptable and payable to the CONTRACTOR and no dispute or claim whatsoever shall be entertained on this account. ------------------------ 18. If the contractor is not able to complete the work because of any reason, the work can be got executed by debitable agency. Also the corporation shall be free to forfeit the security and earnest money deposited by the contractor. 19. ----------- 20. All the tests required as per Technical Specification shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. i. (v) provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not in the similar line of business or supply of manpower for any purpose or service portion in execution of works contract by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory; B. (II) The extent of service tax payable thereon by the person who provides the service and the person who receives the service for the taxable services specified in (I) shall be as specified in the following Table, namely:- TABLE Sl.No. Description of a service Percentage of service tax payable by the person providing service Percentage of service tax payable by the person receiving the service 8. in respect of services provided or agreed to be provided by way of supply of manpower for any purpose 25% 75 % ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid decisions as they are for the period prior to the amendments made in the year 2012, when the charge of service tax was on the basis of definition of various services. All though, the principles as stated in the decisions for consideration whether a particular service can be treated as a Manpower Supply Service can be taken from this judgment of Hon ble Allahabad Jurisdictional High Court in the case of Commissioner of Central Excise Vs M/s Computer Sciences Corporation India Pvt. Ltd. 2014-TIOL-1896-HC-ALL-ST, wherein following has been held:- 7. In order to be a taxable service within the meaning of Section 65(105)(k), the service must meet the following requirements : (i) there has to be a service provided or to be provided to any person; (ii) the service has to be provided by a manpower recruitment or supply agency; and (iii) the service must be provided in relation to the recruitment or supply of manpower, temporarily or otherwise, in any manner. 8. In the present case, the Commissioner clearly missed the requirement that the service which is provided or to be provided, must be by a manpower recruitment or supply agency. Moreover, such a service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the sugarcane supplied and not for the supply of any manpower. From these agreements, it is obvious that no manpower has been supplied by the appellant to the sugar factory to constitute supply of manpower. As per Section 65(105)(k) of the Finance Act, 1994, taxable service means any service provided or to be provided to any person, by a manpower recruitment or supply agency in relation to the recruitment or supply of manpower, temporarily or otherwise, in any manner . From the documents available on record, we do not find any activity undertaken by the Trust either for the recruitment of manpower or for supply of manpower to the sugar factory. This Tribunal, in similar circumstances, in the case of Amrit Sanjivni Sugarcane Transport Co. Pvt. Ltd. (supra) held that harvesting of sugarcane and transportation thereof to the sugar factory from the farmers fields would not come under the purview of manpower recruitment or supply agency service and would be more appropriately classifiable under business auxiliary services . These decisions relied upon by the appellant and the orders of the Commissioner (Appeals) also support this view. Merely because in the statements, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract would be decisive. An identical view was taken up by Hon ble Supreme Court in the case of State of A.P. v. Kone Elevators India Ltd. (supra) and UOI v. Mahindra and Mahindra in a similar issues. The ratio of all the three judgments of the Hon ble Supreme Court, is that the tenor of agreement between the parties has to be understood and interpreted on the basis that the said agreement reflected the role of parties. The said ratio applies to the current cases in hand. We find that the entire tenor of the agreement and the purchase orders issued by the appellants service recipient clearly indicates the execution of a lump-sum work. In our opinion this lump-sum work would not fall under the category of providing of service of supply of manpower temporarily or otherwise either directly or indirectly. 10. On perusal of the records and the submissions of learned SDR on the Master Circular dated 23-8-2007, we find that the issue is raised at clause 010.02 is as under : Business or industrial organizations engage services of manpower recruitment or supply agencies for temporary supply of manpower which is engaged for a specified period ..... X X X X Extracts X X X X X X X X Extracts X X X X
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