5/10/2016

MANISH ENTERPRISES Vs CCE-TIOL

2016­TIOL­119­CESTAT­MUM  IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL  WEST ZONAL BENCH, MUMBAI COURT NO.II   APPEAL NO. ST/206/12­MUM   Arising out of Order­in­Appeal No. PI/RKS/04/2012/1441 dtd. 10/1/2012  passed by the Commissioner (Appeals), Central Excise, Pune I Date of Hearing : 30.10.2015  Date of Decision : 30.10.2015 M/s MANISH ENTERPRISES Vs COMMISSIONER OF CENTRAL EXCISE, PUNE I Appellant Rep by: Ms Padmavati Patil, Adv Respondent Rep by: Shri S L Karoliya, Asstt. Commissioner (A.R.) CORAM: P S Pruthi, Member (T)  Ramesh Nair, Member (J) ST  –  Manpower  Recruitment  &  Supply  Agency  ­  Appellant  has  deputed  manpower  to carry  out  job  work  on  behalf  of  their  client  i.e.  conversion  of  Aluminum  Ingots  to Aluminum Castings ­ Charges for the job work are based on the quantum of production and  not  against  supply  of  manpower,  therefore,  activity  remains  as  production  on behalf  of  the  client  in  the  factory  of  the  client  ­  Though  the  appellant  was  deputing manpower but services  which  were  carried  out  is  job  work  in  the  client's  factory  and since  the  said  activity  amounts  to  manufacture  it  does  not  fall  under  category  of Manpower Recruitment Services – further, since activity of the appellant amounted to manufacture  of  goods  it  is  not  covered  under  Business  Auxiliary  Services,  as Manufacturing  activity  stands  excluded  in  the  definition  to  BAS  –  furthermore,  if  it  is considered as taxable activity, the same is exempted under Notification No. 8/2005­ST dated  1/3/2005  ­  ratio  of  the  judgment  in  Hemant  V.  Deshmukh  [2014­TIOL­1052­ CESTAT­MUM] is squarely applicable to the facts of the present case – order set aside and appeal allowed with consequential relief, if any: CESTAT [para 6] Appeal allowed Case law cited ­ Hemant  V.  Deshmukh  vs.  Commissioner  of  C.Ex  ,  Goa  ­  2014­TIOL­1052­CESTAT­ MUM… para 3, 6…followed ORDER NO: A/3724/15/STB Per: Ramesh Nair This  appeal  is  directed  against  Order­in­Appeal  No.  PI/RKS/04/2012/1441  dtd.  10/1/2012 passed  by  the  Commissioner  (Appeals),  Central  Excise,  Pune­I,  wherein  the  Ld.  Commissioner (Appeals) upheld the Order­in­Original No. PI/ADC/STC/10/2011 dated 29/9/2011 and rejected the appeal of appellant. 2.  The  facts  of  the  present  case  is  that  the  appellant  is  providing  the  job  work  by  converting Aluminum Ingots to Aluminum casting which amounts to manufacture. The Revenue contended http://www.taxindiaonline.com/RC2/printCase.php?QoPmnXyZ=MTEwMTE5

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5/10/2016

MANISH ENTERPRISES Vs CCE-TIOL

that appellant providing labour and which falls under ‘Manpower Recruitment Agency Services', accordingly  they  are  liable  to  pay  Service  Tax  for  the  period  2007­08  and  2008­09.  The Adjudicating  Authority  has  confirmed  the  demand  and  imposed  penalty.  Aggrieved  by  the  said Adjudication  order  appellant  filed  appeal  before  the  Commissioner  (Appeals)  who  upheld  the Order­in­Original by passing the impugned order therefore appellant is before us. 3. Ms. Padmavati Patil, ld. Counsel for the appellant submits that they deputed the manpower to carry out the job work on the basis of quantum of production on the material supplied by their client. The payment for the labourers is not made towards salary/wages on the basis of number of  labourers,  payment  is  made  on  the  basis  of  quantum  of  production  carried  out  by  the  job worker,  therefore  they  are  not  providing  man  power.  They  are  only  carrying  out  job  work  for their  client.  The  activity  is  amount  to  manufacture  which  is  excluded  from  the  provisions  of Service  tax  under  the  head  of  ‘Business  Auxiliary  Services'  on  behalf  of  the  client.  She  also submits that in any case the job work on the material supplied by the client is exempted service by virtue Notification No. 8/2005­ST  dated 1/3/2005. In support of her submission, she  placed reliance  on  the  judgments  in  case  of  Hemant  V.  Deshmukh  vs.  Commissioner  of  C.Ex,  Goa (2014(35) STR 602 (Tri. Mumbai)] = 2014­TIOL­1052­CESTAT­MUM. 4. On the other hand, Shri S.l. Karoliya, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. 5. We have carefully considered submissions made by both sides. 6. The undisputed fact in this case is that appellant has carried out job work on behalf of their client  i.e.  conversion  of  Aluminum  Ingots  to  Aluminum  Castings.  The  charges  for  the  job  work are based on the quantum of production and not against supply of manpower. Therefore activity remains as production on behalf of the client in the factory of the client. In this fact though the appellant  was  deputing  the  manpower  but  services  which  carried  out  were  job  work  in  the client's factory, the said activity amounts to manufacture, hence, does not fall under category of Manpower Recruitment Services. Since activity of the appellant amounting to manufacture of the goods, even it is not covered under Business Auxiliary Services, as Manufacturing activity stands excluded in the definition to Business Auxiliary Services. We also agree with the ld. Counsel that if  it  is  considered  as  taxable  activity,  the  same  is  exempted  under  Notification  No.  8/2005­ST dated 1/3/2005. On going through judgment cited by the Ld. Counsel, we find that the ratio of the  judgment  squarely  applicable  to  the  facts  of  the  present  case.  In  view  of  the  above discussions,  we  set  aside  the  impugned  order  and  allow  the  appeal  of  the  appellant  with consequential relief, if any, in accordance with law. (Dictated in court) (DISCLAIMER: Though all efforts have been made to reproduce the order correctly but the access and circulation  is  subject  to  the  condition  that  Taxindiaonline  are  not  responsible/liable  for  any  loss  or damage caused to anyone due to any mistake/error/omissions.)

 

 

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2016tiol119cestatmum in the customs, excise and service tax ...

Oct 5, 2016 - manufacture of goods it is not covered under Business Auxiliary Services, as. Manufacturing activity stands excluded in the definition to BAS ...

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