The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand on the manufacture of various types of brass articles on the ground of non-falling of service category into the supply agency service.
Roopsinh Jodhsinh Chauhan, the appellant assessee is engaged by Rajhans Metals Pvt. Limited for undertaking activities of loading and unloading of scrap, sorting, breaking, cutting, and casting of brass scrap into the foundry, and processing and packing of brass rods/ section post manufacturing activity.
As per the terms of the contract/ agreement, the assessee was engaged as a worker of Rajhans Metal Pvt. Limited for carrying out the processing of goods on behalf of their principal service recipient namely Rajhans Metal Pvt. Limited for helping in manufacturing of various types of brass articles which were further cleared on payment of Central Excise duty by Rajhans Metal Pvt. Limited.
The assessee appealed against the order passed by the adjudicating authority for confirming the service tax demand on the service category of manpower recruitment agent services or supply agent service.
Jigar Shah and Amber Kumrawat, the counsels for the assessee contended that the assessee had not supplied any manpower to the client as per the contract the same is basically for the execution of a particular work as per the work contract at a per Kg/ MT rate fixed for the work.
Anoop Kumar Mudvel, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee had provided Manpower Recruitment or Supply Agency service and therefore they should have discharged the service tax liability on the same.
The Bench observed that in the case of Nishkarsh Industrial Services, the court held that the assessee had not provided the ‘Manpower Recruitment or Supply Agency Services’. Therefore, the demand made under the said category was not sustainable.
The two-member bench comprising Somesh Arora (Judicial) and C L Mahar (Technical) quashed the service tax demand while allowing the appeal filed by the assessee.
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