Order Date – 20 December 2023

Parties: Saraswati Engineering Vs C.C.E. & S.T.-Rajkot

Facts –

• The Appellant, Saraswati Engineering, providing Erection Installation and Commissioning Service and considering the service as Manpower Recruitment & Supply Agency Service, availed the abatement of 75% and paid the service tax only on 25% and the remaining 75% is paid by the service recipient.
• It was alleged by the department that the appellant is liable to discharge the remaining 75% of service tax, furter alleged that service tax is payable on service provided to Reliance Industries Limited (SEZ) Jamnagar Unit.

Issue –

• Whether the appellant can avail abatement of 75% and whether the service falls under Manpower Recruitment & Supply Agency Service?

Order –

• The Tribunal observed that from the contract order it is clear that the appellant has provided the service of Scaffolding, Erection and Dismantling. From the nature of the service, there is no doubt that the service does not fall under the Man-power recruitment or supply agency service.
• Moreover, the job is not on the basis of man hour or number of man power but it is on the quantum of work and the rate is also as per cubic meter of Scaffolding, Erection & Dismantling, therefore, the service is undisputedly does not fall under Manpower Agency Service but falls under Erection Installation & Commissioning Service.
• Even though the appellant’s service is classifiable under Erection Installation & Commissioning Service but the fact remains that on the entire service the service tax was paid i.e. 25% by the appellant and on 75% by the service recipient. Since the entire service has suffered the service tax only for technical reason the department has no right to demand the service tax twice, therefore, on this ground, the service tax demand on the basis of is not sustainable.
• As regard, the demand on the service provided to Reliance Industries Limited (SEZ) Jamnagar Unit, it is a settled law and even as per the SEZ Act, that any service provided to SEZ is exempted from payment of service tax. Hence the service tax demand is not sustainable. Hence, the same is set aside. Appeals are allowed.