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2026 Supreme(Online)(CESTAT) 2070
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Ajaya Krishna Vishvesha, Judicial Member, Satendra Vikram Singh, Technical Member
Himadri Speciality Chemical Limited – Appellant
Versus
Commissioner Of Cgst & Central Excise Surat – Respondent
Service Tax Appeal No. 12307 of 2018
For the Appellants/Petitioners: Shri Rajeev Agarwal
For the Respondents: Shri M P Solanki
A contract for specific job completion where the contractor maintains supervision and control over workmen does not qualify as 'manpower supply service'. Additionally, jurisdictional authorities lack power to issue demand notices to entities possessing a centralized service tax registration elsewhere.
Headnote:The dispute centers on the applicability of service tax on a contract for loading, unloading, and charging of materials, specifically whether such work constitutes 'manpower supply service' requiring service tax payment under the Reverse Charge Mechanism (RCM) per Notification No. 30/2012-ST. The Appellant, holding a centralized service tax registration at Kolkata, challenged the jurisdiction of the Vadodara Audit-III Commissionerate to issue a show cause notice and the subsequent confirmation of demand by the Valsad Commissionerate, alongside the merits of the classification. Key issues included the territorial jurisdiction for issuing demands against centrally registered entities and the distinction between a 'manpower supply service' and a 'service contract' based on supervision and control elements. The Tribunal observed that if a contract tasks a contractor with specific work completion under their own supervision—rather than merely supplying personnel for the client's utilization—it does not constitute 'manpower recruitment or supply agency service'. Furthermore, demands raised by local authorities against entities holding valid centralized registrations are unsustainable. The final outcome is that the appeal is allowed and the impugned order is set aside.
| Table of Content |
|---|
| 1. appellant arguments regarding lack of jurisdiction and nature of service contract. (Para 2 , 3) |
| 2. revenue arguments justifying classification as manpower supply service. (Para 4) |
| 3. court finding on lack of jurisdiction and determination that contracts for specific services are not manpower supply. (Para 5 , 6) |
SATENDRA VIKRAM SINGH
M/s. Himadri Chemicals & Industries Ltd., Vapi (Appellant) filed the present appeal against impugned order dated 16.05.2018 passed by learned Commissioner (Appeals), Surat.
1.1 As per the facts, Audit officers scrutinized the records and balance sheet of the company and found that the appellant had incurred expenses under miscellaneous head towards loading and unloading charges paid to Mr. Shyam B. Mandal, who supplied man power to the appellant. Revenue alleged that as per Notification No.30/2012-ST dated 20.06.2012, the appellant was required to pay service tax on 75% of the value of man power supply service on reverse charge basis (RCM). Accordingly, show cause notice dated 27.11.2015 was issued to appellant by invoking extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 for demanding service tax of Rs.1,67,291/- for the year 2012-2013 to 2014-2015 under man power supply service on RCM basis along with interest under Section 75 of the Finance Act, 1994 and penalty under Section 78(1) of the said Act. It was alleged that they have suppressed the fact of receipt of manpower supply service from the department and thus, evaded payment of service tax. The show cause notice mentioned that the appellant was having centralized service tax registration with Kolkata Service Tax Commissionerate.
1.2 The matter was decided by the Assistant Commissioner vide order dated 04.05.2017 wherein, he confirmed the service tax demand of Rs.1,67,291/- along with interest and also imposed equal penalty under Section 78. Aggrieved with this order, the appellant filed appeal before the Commissioner (Appeals) who upheld the order of the lower authority by rejecting their appeal. Hence, the present appeal before this Tribunal.
2. In their appeal, the appellant took following grounds:-
• Learned Commissioner (Appeals) grossly erred in completely brushing aside their appeal dated 03.08.2017. Therefore, impugned order is passed without proper consideration of their submissions and verification of details and hence, liable to be set aside.
• They are having centralized registration with Kolkata Service Tax Commissionerate which fact has also been admitted in the show cause notice. In their case, show cause notice for demanding service tax can only be issued by Kolkata Service Tax Commissionerate. Therefore, show cause notice issued by Vadodara Audit-III Commissionerate and the order passed by CGST, Division-II, Valsad are beyond jurisdiction. This contention on the aspect of jurisdiction has simply been brushed aside by the Adjudicating Authority as well as Appellate Authority.
• Under man power supply service, service tax is applicable only when one or more person is supplied under a contract. They have entered into a contract with Mr. Shyam B. Mandal for loading and unloading purpose and charging of raw materials in the plant during manufacturing process. The contractor is responsible for the said work who undertakes necessary supervision during the process of loading and unloading and ensures that materials are lifted properly, within time and with due care. The contractor is paid on the basis of agreed per MT rate of loading, unloading and charging of materials. As per the nature of contract, service tax on such service is not payable and so, demand of service tax on reverse charge basis under Notification No.30/2012-ST dated 20.06.2012 without providing any evidence and document is unsustainable.
• Learned Commissioner (Appeals) falsely alleged that the present case attracts manufacturing process, and so, the above transactions attract central excise duty and does not att
