The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no Service Tax demandable under ‘Manpower Recruitment and Supply Agency Services’ for Expenses of Harvesting and Transportation of Sugarcane.
Shri K.J. Kinariwala, Consultant and Shri Amal Dave, Advocate appeared for the Appellants and Shri Vijay G Iyengar, Superintendent & Shri Shri Kalpesh P Shah, Superintendent (Authorised Representatives) appeared for the Revenue.
M/s. Talala Taluka Sahakari Khand Udyog Mandali Limited, submitted that there is no arrangement for supply of manpower for harvesting and transportation whereas the contract was for harvesting and transportation of sugarcane and the charges for such activities is per ton basis. The farmers are not concerned with number of manpower, man-days, or man-hours for making payment and the charges are made per-ton of sugarcane basis. There is no supply of man power.
It was submitted that the appellants have no arrangement for supply of manpower for harvesting and transportation of sugarcane for supply to sugar mills. The charges were calculated on per ton basis therefore, the number of manpower, man-days or man-hours is not relevant for carrying out the activities of harvesting, transportation etc. The arrangement is job specific and not the manpower specific.
The Sanstha also will carry out the jobs of handling of sugar, feeding of sugarcane in the sugar mill, cleaning of parking yard of vehicles transporting sugarcane, loading/unloading/handling of pressmud, baling of bagasse, handling of loose bagasse, collecting/removing/disposal of boiler ash, supply of wood for burning into the boiler, handling/stacking of compost, disposal of spentwash by spraying on the pressmud, stitching of sugar bags. The rates for the said job will be decided by the Karkhana and Sanstha.
The karkhana will retain 15% amount of every bill raised for cane cutting transportation job as well as other jobs as security deposit and will handover to the Sanstha after satisfactory completion of the jobs by the Sanstha. Since Co-operative societies are exempted from stamp duty, the agreement is not done on stamp paper.
Considering the various decisions referred above including judgment of Bombay High Court, a Coram of Mr. Ramesh Nair, Member (Judicial) Mr. Raju, Member (Technical) held that the demand under Manpower Recruitment and Supply Agency Services is not sustainable. The impugned orders are set-aside and appeals was allowed with consequential relief.
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