The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the service tax demand and held that the unloading of coal from railway wagons and for transportation to coal yard is not manpower recruitment or supply agency service.
S. Selvam, Lorry Transporting and Civil Contractor, the appellant, was engaged by M/s. BHEL Complex Co-operative Labour Contract Society Ltd., Trichy for the purpose of unloading of coal from railway wagons and for its transportation to the coal yard.
When the accounts of the society were audited, the officers have noticed certain payments being made by the Society to the appellant, who is a sub-contractor, during the period from 2007-08 to 2009-10. Consequently, a show cause noticewas issued to the appellant inter alia proposing demand of service tax under “manpower recruitment or supply agency” service by invoking the extended period of limitation.
The appellant stated that he has not been engaged for recruitment of any labourers or for supply of manpower, but for executing the works of loading, unloading, transportation and stacking of coal at the coalyard and that the services rendered by him are more appropriately classifiable under goods transport agency services.
It has been further put forth that in respect of goods transport agencyservice, the liability for payment of service tax would fall on the service recipient i.e., the society, and that from the records it was clear that the Society had already paid the service tax under the head manpower recruitment or supply agencyservice on the entire consideration received from M/s. BHEL, Trichy and as such, the demand of service tax once again under manpower recruitment or supply agency on the subcontractor would not be legally sustainable.
M. Ambe, Authorized Representative appearing for the Revenue contended that the services of the appellant could not come under „goods transport agency‟ as a goods transport agency means “any person who provides service in relation to transport of goods by road and issues a consignment note, by whatever name called”.
The Coram comprising P Dinesha, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “The work that was given to the appellant was for unloading, transportation and stacking of coal from the railway wagons to the coal yard and the documents available in the appeal indicate that there is no agreement for supply of manpower to the recipient of service i.e., M/s. BHEL Complex Co-operative Labour Contract Society Ltd., Trichy.”
“We have to hold that the appeal succeeds on merits. The services rendered by the appellant cannot be classified under the category of “manpower recruitment or supply agency” service” the Tribunal noted.
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