COMMISSIONER OF CENTRAL EXCISE Vs. SHRIRAM SAO TVS LTD.
LAWS(CE)-2015-3-49
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on March 13,2015

COMMISSIONER OF CENTRAL EXCISE Appellant
VERSUS
Shriram Sao Tvs Ltd. Respondents




JUDGEMENT

M.V.RAVINDRAN,MEMBER (J) - (1.)THIS appeal is filed by the Revenue against Order -in -Appeal No. P -II/PAP/67/2010, dated 21 -4 -2010 passed by Commissioner of Central Excise (Appeals), Pune. Heard both the sides and perused the records.
The issue involved in this case is regarding the service tax liability of the respondent under the category of "Manpower Recruitment and Supply Agency Service". The lower authorities came to a conclusion that the respondent who is registered under co -operative society; service tax liability gets confirmed for undertaking the activities of cutting/harvesting and transporting of sugarcane to Sugar factory as the assessee is functioning on behalf of the farmers enters into a contract with labour contractors for arranging manpower for the purpose of harvesting/cutting and transporting of sugarcane to sugar factories. Coming to such a conclusion, show cause notices were issued to the respondent and the adjudicating authority confirmed the demands on the respondent. Aggrieved of the such order an appeal was preferred before the first appellate authority. The first appellate authority after following the due process of law came to a conclusion that the services rendered by the appellant would not fall under the category of manpower supply agency service and hence set aside the order -in -original.

(2.)WE find that the issue is no more res integra inasmuch as this Bench has held in the case of Bhogavati Janseva Trust v. CCE, Kolhapur - : 2014 (34) S.T.R. 410 (Tri -Mum) on an identical issue has held in favour of the assessee. The same view was expressed by the Bench in Satara Sahakari Shetu Audyogik Oos Todani Vahtook Society v. CCE, Kolhapur - : 2014 (36) S.T.R. 123 (Tri -Mum). It was brought to our notice that identical view was expressed by the Bench in the case of Godavari Khore Cane Transport Company Pvf. Ltd. Central Excise Appeal No. 19 of 2014. The judgment of the Godavari Khore Cane Transport Company Pvt. Ltd. was taken in appeal by the Revenue before the Hon'ble High Court of Bombay at Aurangabad. Their Lordships has upheld the order of the Tribunal reported as in Appeal Nos. ST/256/2008, S.T./68, 7/2009 -Mum. [ : 2012 (26) S.T.R. 310 (Tri -Mum)]. The ratio of the judgment of the Hon'ble High Court at Para 6 & 7; we with utmost respect reproduce the same.
"6. We are not inclined to accept this submission because, as said above, the services provided by the respondent, though for harvesting, loading, unloading, etc., it was essentially a package deal through which the sugar factory would get their essential raw material supplied to their factory site. In what manner the work is done was known to the sugar factory but was not their concern really. The sugar factory was aware that this work is done with the help of number of labours, whose services are procured by the respondent either individually or through some other agencies but how was such work done was not the concern of the sugar factory. Harvesting sugarcane, atleast today, is a labour intensive activity. Very soon, this work would be done mechanically. So, the nature of work undertaken by the respondent must be understood in the context in which it was understood by the respondent and its principal -sugar factory. This interpretation of the agreement between the respondent and its principal is in tune with the judgment of the Supreme Court in the case of Super Poly Fabriks Ltd. v. Commissioner of C. Ex., Punjab, reported in : 2008 (10) S.T.R. 545 (S.C.). Paragraph No. 8 of the said judgment can be relied upon to drag the point home, which reads as under: -

"8. There cannot be any doubt whatsoever that a document has to be read as a whole. The purport and object with which the parties thereto entered into a contract ought to be ascertained only from the terms and conditions thereof. Neither the nomenclature of the document nor any particular activity undertaken by the parties to the contract would be decisive."

7. In any case, the agreement itself is eloquent enough to draw the above conclusion. In this background, we must look at the show cause notice dated 16 -10 -2008. On that date, whether the Revenue was in a position to levy tax on services provided by the respondent? The answer has to be in negative. Having regard to the history of service tax in our country, it becomes clear that when the State was in the process of including various types of services in service tax net, the State's policy was to include different services at different point of time. For the first time in 1997, the State included Recruitment Service as taxable service. Slowly, labour contract services were also made taxable in the year 2005. The package deal which is involved in this case was not subjected to service tax in the year 2005 and so, the Revenue was really not able to demand service tax to the respondent. The provisions of Finance Act did not give them sufficient leeway. So the notice and demand was uncalled for. After the notice was issued and the demand was made, it became a difficult endeavour for the Revenue to bring the service provided by the respondent within the definition of Manpower Recruitment and Supply Agency. In our view, it was not possible for them to do so then. Since then much water has flown and now sufficient amendments are made in the relevant provisions. We are told that now all services, except the services mentioned in the "negative list" are made taxable. Until this provision is made i.e. July, 2012, the situation was different for the Revenue and apparently, the services rendered by the respondent at the relevant time were found not taxable."

(3.)IN view of the judicial pronouncements on the same issue we do not find any merits in the appeal filed by the Revenue. The appeal filed by the Revenue is rejected. The cross objection filed by the appellant is also disposed of.
(Dictated in Court)

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