Service Tax - Cestat Ahmedabad: As there is no element of manpower supply or recruitment of farmers by the appellants to the sugar factory and therefore, services rendered by the appellants cannot be classified under manpower recruitment or supply agency services – Appeal allowed [Order Attached]
Order date – 06 December 2022
- The Appellant, Talala Taluka Sahakari Khand Udyog Mandali Limited has an 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 deducted the expenses of harvesting and transportation of sugarcane.
- The department demanded service tax on expenses charged to the farmers which is liable to service tax under the category of ‘Manpower Recruitment and Supply Agency Services’.
- Being aggrieved, the appellant filed an appeal
- Whether the expenses charged to the farmers would fall within the definition of “Manpower Recruitment or Supply Agency Services”?
- The Tribunal relied on the decision in the case of Satara Sahakari Shetu Audyogik Oos Todani Vahtook Society vs. CCE, Kolhapur – 2014 (36) STR 123 (Tri. Mumbai) wherein it was held that 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 stretch of imagination.
- Considering the various decisions including judgment of Hon’ble Bombay High Court, it was held that the issue is no more res-integra and the demand under Manpower Recruitment and Supply Agency Services is not sustainable.
- The appeals are allowed.