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TMI Blog2023 (12) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on the demand of service tax of Rs. 72,73,695/- against M/s U.P State Bridge Corporation Limited, 218, PWD Colony, Civil Lines, Meerut under Section 75 of the Finance Act, 1994. iii. I impose penalty of Rs. 72,73,695/- (Rupees Seventy Two Lac Seventy Three Thousand Six Hundred Ninety Five only) i.e. equal to the demand of Service tax of Rs. 72,73,695/- under Section 78 of the Finance Act, 1994 against M/s U.P State Bridge Corporation Limited, 218, PWD Colony, Civil Lines, Meerut. The benefit of reduced penalty i.e. equal to 25% of the total penalty imposed shall be available to the party as per clause (ii) of Second proviso to Section 78 of the Finance Act, 1994 if they deposit due service tax and interest amount along with reduced penalty within 30 days of receipt of order. iv. I impose penalty of Rs. 10,000/-(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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Finance Act, 1994; V. Interest on the amount of service tax mentioned at Sl. No. (ii) above, should not be demanded from them under Section 75 of the Finance Act, 1994. An amount of Rs. 7899/- already deposited by them against interest should not be appropriated against the said demand of interest; VI. Interest on the amount of service tax mentioned at Sl. No. (iii) above, should not be demanded from them under Section 75 of the Finance Act, 1994. An amount of Rs. 10,177/- already deposited by them against interest should not be appropriated against the said demand of interest; VII. Penalty should not be imposed upon them under Section 78 of the Finance Act, 1994 for non-payment of Service tax amounting to Rs. 72,73,695/- (Rupees Seventy Two Lakh Seventy Three Thousand Six Hundred Ninety 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 Thousa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te involves works undertaken by the appellant though contractors related to activities stated above, which has been considered as manpower service though the term itself shows that these are activities related to construction. The demand was made under reverse charge mechanism as applicable under Notification No. 30/2012-ST dated 20.06.2012 and confirmed by the impugned order. * The works given to the contractors for which neither competitive bidding nor tenders are invited as per the policy of the appellant. These are fix rate works approved by PWD or Bridge Corporation and corporation has set numbers of contractors who are always available for such work. The site Engineer's statement which has been relied upon do not support the case of the revenue. The site engineer 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 dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manpower but specific job the nature of which is duly recorded in the contract agreement; that Order has been passed without considering the relevant purchase orders and bills such as M / s Juneja Construction (P) Limited, Meerut, M / S RCC Developers Limited, Meerut, M/s Shri Dimag Singh and M/s Shivalik Infraventures (P) Limited and four other sample contracts which shows that the nature of work which had been allotted to the contractors were not for manpower but for work like pouring of concrete, shuttering and centring, reinforcement work and local shifting of shuttering & centring and that the payment has been given to the contractors on the basis of per metric/per cubic meter/per beg/per beam/per job/per point etc. basis 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 unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no linking with the present issue. (ii) Agreement dated Nil related to M / s Dimag Singh, 26, Ganna Society Market, Khatauli- It pertains to GSB Work & WMM work for ROB-55, Mewla Bridge, Meerut. The facts of this document are entirely different. (iii) Agreement dated 17.11.13 of M/s Shivalik Infraventures (P) Limited, Saharanpur is related to WMM, Prime Coat Tack Coat etc (iv) Agreement dated 30.07.2014 of M/s Juneja Construction Pvt Limited is related to work defined as DBM, BC, Prime Coat etc. (v) Agreement dated 01.06.2013 of M/s RCC Developers Limited, Meerut is related to laying of GSB 115 MM and laying of W.M.M 125 MM Abu Nala Bridge Meerut. Thus, in view of the facts discussed above and 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) The labour should work under the superintendence and control of the principal. 7.7 I find that Sh. Satish Kumar, Project Manager of the appellant in his letter dated 20.10.2014 had categorically admitted that following works constitute labour work only and completed under supervision of their technical staff- (i) Pouring of concrete (ii) Shuttering and centring (iii) Reinforcement work (iv) Local shifting of shuttering & Centring and reinforcement at site. I further find that Sh. Vinod Kumar Singh, Assistant Engineer & authorized person of the appellant in his statement dated 12.02.2015 recorded under Section 14 of the Central Excise Act, 1994 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contracts are not for supply of labour but are for supply of material. Work done under these contracts is for undertaking a work activity involving supply of material also. Then on what basis revenue could have concluded that these activities amounted to 'Supply of Manpower Service' to the appellant for demanding service tax. 4.6 We also perused the documents of the appellant, stating General Terms and Conditions (GSB & WMM Work), and some of them are reproduced bellow:- "2. The Quantities indicated in BOQ are tentative and can vary +/- 20% as per site conditions which is at the sole discretion 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 screenin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter shall apply to such person to the extent so specified and the remaining part of the service tax shall be paid by the service provider Notification No. 30/2012-ST dated 20.06.2012 In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), ..., the Central Government hereby notifies the following taxable services and the extent of service tax payable thereon by the person liable to pay service tax for the purposes of the said sub-section, namely:- (I) The taxable services,- 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e set aside. 4.12 Further, Counsel for the appellant has relied upon the various decisions which have held that which supports the case for holding that the services received by the appellant do not qualify as Manpower Supply Services. Though, we agree with the principals lead down in the said decisions but we are not in a position to follow the said 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 (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retch of imagination, be called supply of manpower. We have also perused the agreement entered into between the Trust and the transporters and as per this agreement, it is for the transporter to engage labour for harvesting and transporting the sugarcane to the sugar factory and the rates agreed to be paid are on tonnage 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' f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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