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

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. ST/537/10-Mum (Arising out of Order-in-Appeal No. SR/241/NGP/2010 dated 30/07/2010 passed by Commissioner of Central Excise (Appeals), Nagpur) For approval and signature: C.J. Mathew, Member (Technical) Honble Mr. M.V. Ravindran, Member (Judicial)Honble Mr. ==================================================

1. Whether Press Reporters may be allowed to see :No 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 :No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ================================================== Commissioner of Central Excise, Nagpur Appellant Vs. M/s. Sitaram Sharma Respondent Appearance: Shri A.B. Kulgod, Assistant Commissioner (AR), for Appellant None for Respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing : 22/09/2015 Date of Decision : 22/09/2015 ORDER NO Per: M.V. Ravindran

This appeal is filed by the department against Order-in-Appeal No. SR/241/NGP/2010 dated 30/07/2010.

2. None appeared on behalf of the respondent despite notice. Since the issue involved lies in a narrow compass, we take up the appeal for disposal even in the absence of the respondent.

3. Heard the learned departmental representative and perused the records.

4. The issue involved in this case is regarding where the respondent is liable for service tax under the category of Manpower Recoupment or Supply Agency Services or otherwise the respondent during the period 16/06/2005 to 2008-09 received some amount from M/s. Amitasha Enterprises P. Ltd. Nagpur for the services rendered like shifting, bundling, packaging, stacking and changing and filling of the client material in the factory of the said M/s. Amitasha Enterprises P. Ltd. The lower authorities were on the view that this activity will fall under the category of Manpower Recoupment or Supply Agency Services, show cause notice was adjudicated by the adjudicating authority, who confirmed the demand raised with interest and also imposed penalties. On the appeal by the assessee, the first appellate authority relying upon the judgment of the Tribunal set aside the order-in-original.

5. On perusal of the records, it transpires that the respondent herein was one of the contractors engaged by M/s. Amitasha Enterprises P. Ltd. and undertaken some work within factory premises of M/s. Amitasha Enterprises P. Ltd on lump sum work. This factual position has been recorded by the first appellate authority in is order-in-appeal. We reproduce relevant paragraphs.

8. Further, in the instant case, it is on record that M/s. Arnitasha Enterprises Pvt. Ltd. , supplies the galvanized material to the appellant. Appellants then pick up the material from the production line and render certain jobs such as shifting, bundling, packaging, and stacking changing and filing works etc. Once the activity of Appellants is over, Mis. Amitasha Enterprises Pvt. Ltd. enter the production in its Daily Htock. Register (RG-I) and clear the goods on payment of appropriate of duty. The entire job is carried out within the factory premises before RG-I stage. Thus the activity undertaken by tile Appellants is with respect 10 the goods which are till 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.

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9.The appellants have also claimed that M/s. Amitasha Enterprises Pvt. Ltd. is paying Central Excise duty on the work charges paid to the Appellants by including it in their assessable value.

in support of the same, a copy of the certificate of M/s. Amitasha Enterprises Pvt. Ltd duly endorsed by their Chartered Accountant has also been furnished confirming the above position a copy of the said certificate is scanned below:

Execution of lump-sum work, the services provided by tile appellants would not constitute supply of manpower directly or indirectly, temporarily or otherwise. "

In the present case, the activity carried out by the Appellants is part and parcel of the manufacturing activity of Transmission Line Tower. M/s. Amitasha Enterprises Pvt. Ltd. have also admittedly factored in the above expenses incurred towards the activities of the appellants, in their cost of production on which appropriate duty was paid at the time of its clearances from their factory. As pleaded by the appellants, under such circumstances, demanding service tax again on the amount on which Central Excise duty is being paid by MIs, Amitasha Enterprises Pvt. Ltd. is nothing but double taxation. In view of the above legal Position, I hold that the above case law IS squarely applicable In the instant case and therefore the impugned Order-In-Original is liable to be quashed. . i , '

.... 7the contracts given to the appellants are for execution of the work of loading, unloading, bagging, stalking destalking etc and there is not a slightest whisper of supply manpower. The tenor of agreement between the parties has to be understood and interpreted in its entirety. Since, in the instant case, the entire tenor of the agreement and the purchase orders issued by the service recipients clearly indicates

In view of this factual position, the demand of service tax on the said charges for the packing and other activities carried already included in the assessable value of the final products cleared on payment of duty by m/s Amitasha Enterprises Pvt. Ltd. is not sustainable. \

10. The Appellant has also relied heavily on the decision of the Hon 'ble Tribunal in the

Case of M/s. Ritesh Enterprises Vs. CCE, Bangalore as reported in 2010 (18) STR 17 (Tri.-

Ballg)"wherein in similar circumstances, the Hon'ble Tribunal set aside the demand of service tax agree with the aforesaid submission, The relevant extract of the said decision is furnished below:

6. It can be seen from the above that the first appellate authority has considered the entire issue on factual matrix held that the contract is not for the supply of manpower. We find that the first appellate authority has correctly followed the law as settled by the Tribunal in the case of Ritesh Enterprises (supra).

7. In view of forgoing we did not find any reason to interfere in such a reasoned order passed by the first appellate authority.

8. We hold that the impugned order is correct, legal and does not suffer from any infirmity. The appeal filed by the Revenue is devoid on merits, accordingly is rejected.

(Pronounced in Court)

(C.J. Mathew) Member (Technical)

(M.V. Ravindran) Member (Judicial)

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APPEAL No. ST/537/10-Mum 6