The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no service tax is payable on the job of manufacturing Plastic Jars, Containers in factory of service recipient as it is included in Job Work manufacturing and not Manpower Recruitment Service.
The appellants, Jayesh C Patel, Jimmy Enterprise have undertaken the job of manufacturing Plastic Jars and Containers in the factory of the service recipient by the help of their own manpower. The dispute is whether such activity falls under supply of Manpower and Recruitment Service or Job work manufacturing.
The appellant submitted that the appellants have not provided the service of Manpower Recruitment whereas they have undertaken the manufacture of excisable goods in the factory of the service recipient. Therefore, the activity is of manufacture on a Job worker basis and not Supply of Manpower. On query, he further submits that all the obligation as regard manpower is upon the appellants and the service recipient i.e. M/S NKPL has nothing to do with the payment to manpower such as Salary, Wages, PF etc. Accordingly, the activity is not falling under Manpower Recruitment Service but under the Job Work. Therefore, the same is not chargeable to service tax.
The coram of Judicial Member Ramesh Nair and Technical Member Raju held that the activity carried out by the appellant is of Job Work manufacturing and not of Manpower Recruitment Service.
The Tribunal observed that there are two requirements for determining whether a service is taxable service under the category of manpower recruitment or supply agency. First of all, it should be provided by a manpower recruitment or supply agency and secondly it should be in relation to manpower supply or recruitment.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
