A contract for performing specific operational tasks (such as washing and cleaning) using the contractor's own personnel does not constitute 'manpower recruitment or supply agency service' if the obligation is to deliver a specific result rather than to provide manpower.

[ORDER PER: P. ANJANI KUMAR]

Breifly stated the facts of the case are that M/s Ishika Enterprises have entered into a contract dated 31.03.2009 with M/s Bagga Distilleries Hyderabad Pvt Ltd., who are engaged in a manufacture of Alcoholic Beverages. On verification of the accounts of the appellant, Revenue issued a Show Cause Notice dated 30.05.2011, alleging that services rendered by the appellant amounted to supply of manpower service and therefore chargeable to service tax under Section 65(105)(k) of Finance Act 1994, demanding Service Tax of Rs. 1,76,612/- along with interest and penalty. The proposal in the Show Cause Notice was confirmed vide Order-in-Original dated 05.01.2012. On an appeal filed by the appellant, Commissioner (Appeals) vide order dated 31.05.2012 rejected the appeal for non-compliance of the stay order under Section 35F of the Central Excise Act, 1944. On an appeal filed by the appellant, this Bench vide Final Order No. 25489-25493/2013 dated 25.06.2013 remanded the matter back to the Adjudicating Authority to decide the issue on merits.

Impugned order dated 30.12.2013 upheld the original order dated 01.10.2011. Hence this appeal.

Shri P. Sai Makarand, Learned Counsel for the appellant submits that on going through the contract it is very clear that the services provided cannot be categorized under manpower recruitment or supply agency service. The appellant had a contract for supply of specific number of bottles and were paid as per the number of bottles only, therefore, there is no service involved. He would further submit that issue is no longer res-integra having been decided by this very Bench in the case of similarly placed contractors of M/s Bagga Distilleries Hyderabad Pvt Ltd., in the following cases:

i. M/s Rama Enterprises Vs CC, CE & ST, Hyderabad [2026 (1) TMI 653 – CESTAT, Hyderabad]

ii. SS Associates Vs Commissioner of CE, Bangalore [2009 (12) TMI 152 – CESTAT, Bangalore]

iii. Shivshakti Enterprises Vs Commissioner of CE, Pune [2015 (12) TMI 682 – CESTAT, Mumbai]

iv. Bhagyashree Enterprises Vs Commissioner of CE, Pune [2017 (3) TMI 786 – CESTAT, Mumbai]

Learned AR Shri Jyotish Verma, reiterates the findings of the impugned order.

Heard both the sides and perused the records of the case.

On going through the contract, we find that the contract basically deals with washing activities, stacking the bottles in the godown, cleaning of washing area, bottling area, blending area and godown servicing using the manpower of the contractor. It nowhere mentions that the appellant was obligated to supply manpower to M/s Bagga Distilleries Hyderabad Pvt Ltd. Therefore, the allegation of the Department being not based on any fact, is not sustainable. As submitted by the Learned Counsel for the appellant, we find that this Bench in the case of Rama Enterprises held as follows:

9. Learned Commissioner (Appeals), upheld the order of the Adjudicating Authority and confirmed the demand of Service Tax under the category of ‘Manpower Recruitment or Supply Agency services’, along with interest and with some modification about penalty under Section 77 and 78 of the Finance Act, 1994.

10. Learned Counsel for the appellants submits that the “Contract Deed” between appellants and M/s Bagga Distilleries Hyderabad Pvt Ltd., clearly shows that the activity agreed under the contract for providing ‘quality work’ i.e., washing activities, stacking in godowns, cleaning of washing area, bottling area, blending area godowns and surroundings using the manpower of the contractor employed by the M/s Bagga Distilleries Hyderabad Pvt Ltd., and not for supply of manpower by the appellants.

In view of the above, we find that the issue is no longer res-integra and therefore, the appeal is allowed.