Commissioner Of Central Excise, Nagpur vs M/S. Shri K.M. Sharma

(Arising out of Order-in-Appeal No. SR/243/NGP/2010 dated 09.08.2010 passed by the Commissioner of Customs & Central Excise (Appeals) Nagpur )

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S.Pruthi, Member (Technical)

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1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : of the Order?

4. Whether Order is to be circulated to the Departmental : authorities?

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Commissioner of Central Excise, Nagpur : Appellant

VS

M/s. Shri K.M. Sharma : Respondent

Appearance

Shri B.Kumar Iyer, Superintendent (A.R.) for Appellant

None for respondent

CORAM:

Mr. M.V. Ravindran, Member (Judicial) Mr. P.S.Pruthi, Member (Technical)

Date of hearing : 15/04/2015 Date of decision : 15/04/2015

ORDER NO.

Per : M.V. Ravindran

This appeal is directed against Order-in-Appeal No. SR/243/NGP/2010 dated 09.08.2010.

2. When this matter was called out, Advocate on record for respondent Shri Prashant Sadavarte sought an adjournment on the ground that the similar issue is fixed for hearing on 17.4.2015. On perusal of the records, we find that the issue is no more res integra. Accordingly, we reject the application for adjournment and take up the appeal for disposal.

3. Heard Ld. DR. It is his submission that the first appellate authority has dropped the demand raised on the assessee holding that the services rendered by the assessee is not covered under the Manpower Supply and Recruitment Services. He would take us through the entire case records and submit that the first appellate authority has incorrectly appreciated the facts.

4. We have considered the submissions made by the Ld. AR and perused the records.

5. It is the case of the Revenue that during the period 2005-2006 and 2008-2009, the assessee respondent received an amount from one M/s. Amitasha Enterprises Pvt. Ltd., Nagpur for the services rendered and it was alleged that the respondent assessee has rendered the taxable services of Supply of Manpower to M/s. Amitasha Enterprises Pvt. Ltd. We find that the first appellate authority while holding in favour of the respondent assessee has recorded the following findings.

The departments case is that during the scrutiny of records, it was notice that during the period 2005-06 (from 16.06.2005), 2006-07, 2007-08 AND 2008-09, Appellant received an amount of Rs.1725358/-, Rs.1588842/-, Rs.2292442/- and Rs.2003172/- respectively from M/s. Amitasha Enterprises Pvt. Ltd., Nagpur for services rendered by Appellant. It was alleged that the Appellant had rendered the taxable services of supply of Manpower to M/s. Amitasha Enterprises Pvt. Ltd. , MIDC, Nagpur falling under the category Manpower Recruitment of Supply Agency and also received an amount for the services rendered but failed to pay service tax on the amount received. Therefore, the Appellant appeared to be liable to pay Service Tax amounting to Rs.9,01,401/-

The appellant has vehemently contended that they undertook incidental work to fabrication of Iron Steel Products at M/s. Amitasha Enterprises Ltd. The consideration received by them was fixed and charged on per Metric Ton of output given by them to their client and therefore the work done by them on job basis does not fall within purview of levy of Service Tax under category of Manpower Recruitment of Supply Agency. On perusal of their records, it is seen that their plea is supported by the bills raised by them for their activities. A specimen bill is scanned below which would reveal that the charges do not have any nexus with the number/nature/scope of manpower supply. On the contrary, the bill pertains to various types of activities involved and depends on the quantity of material involved.

Further, in the instant case, it is on record that M/s. Amitasha Pvt. Ltd. supplies the galvanized material to the Appellant. Appellants then pick up the material from the production line and under certain jobs such as shifting, bundling, packaging and stacking, chaining and filing works etc. Once the activity of Appellants is over, M/s. Amitasha Enterprises Pvt. Ltd. enter the production in its Daily Stock Register (RG-1) and clear the goods on payment of appropriate rate of duty. The entire job is carried out within the factory premises before RG-1 stage. Thus the activity undertaken by the Appellants is with respect to the goods which are still on the production line of M/s. Amitasha Enterprises Pvt. Ltd. In view of the scope of the Notification No. 8/2005-ST dated 1.03.2005. I hold that the demand of Service Tax from the appellant with respect to the aforesaid activity done by the appellant by the lower authority is not sustainable.

It can be seen from the above reproduced findings that the first appellate authority has on the question of facts specifically held in favour of the respondent assessee. He has also considered the factual matrix by relying upon the bills raised by the respondent assessee which indicates that the respondent assessee had undertaken certain jobs which has been bundled as a contract. In the entire records or the memo of appeals on the ground, Revenue has not brought any contrary evidence disputing the factual matrix recorded by the first appellate authority.

6. In our considered view, the first appellate authority was correct in coming to a conclusion that the services rendered by the respondent assessee will not fall under the category Manpower Supply and Recruitment Services. We concurred with the views of first appellate authority that the issue is now squarely covered by the various decisions of this Bench which relied upon judgment and order of the Tribunal in the case of M/s. Ritish Enterprises Vs. CCE, Bangalore 2010 (18) STR 17 (Tri.-Bang.).

7. In view of the foregoing, we hold that the impugned order is correct and legal and does not suffer from any infirmity.

(Pronounced in court)

(P.S.Pruthi) Member (Technical)

(M.V. Ravindran) Member (Judicial)

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