JIVANBHAI MAKWANA Vs. COMMISSIONER OF C. EX., AHMEDABAD

JUDGEMENT

(1.) THE appellant is engaged in supplying of manpower and is covered by supply of manpower service which was brought into Service tax net with effect from 16 -6 -2005. The appellant had in fact obtained a registration as a manpower recruitment agency on 7-4-2005 but on 1-6-2005 he surrendered the same stating that he was not covered by manpower recruitment agency service. However, with effect from 16 -6 -2005 the definition of service was amended and manpower recruitment or supplied agency was defined to mean any commercial concern engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to a client. Prior to 16 -6 -2005, the definition did not have the word supply of. Thereafter the department advised the appellant to obtain a registration certificate which he obtained on 25 -1 -2007. A show cause notice was issued on 5 -1 -2007 to the appellant for recovery of Service tax of Rs. 1,34,263/ - for the period from 16 -6 -2005 to 31 -3 -2006 with interest and it was also proposed to impose penalty under Sections 76, 77 and 78 of Finance Act, 1994. There is nothing on record and both sides also could not clarify as to what happened to the Service tax liability for the periods from 1 -4 -2006 to 31 -12 -2006.

(2.) AFTER adjudication and appellate proceedings, the Service tax demand has been confirmed with interest as applicable and penalty of Rs. 1,34,263 under Section 78, penalty of Rs. 100/ - per day under Section 76 and a penalty of Rs. 1000/ - under Section 77 of Finance Act, 1994 have been imposed on the appellant. Hence the appeal.

(3.) LEARNED advocate on behalf of the appellants submitted that the service provided by the appellant is not covered by the definition of manpower recruitment or supply service. He took me through the annexure to the contract entered into with Pino Bisazza Glass Pvt. Ltd. and submitted that according to the contract, appellant was only expected to ensure that the factory premise is kept clean, bath rooms, and toilets are cleaned properly and drinking water and coffee to the staff is provided and loading and unloading is also carried out. It is his submission that nowhere the contracts specify the number of labourers to be provided but only speaks of the items of work to be carried out. Therefore, the contract terms are not covered by the service as defined in the Finance Act, 1994 and therefore the appellant is not liable to pay service tax. He also submits that the show cause notice has been issued on 5 -1 -2007 in respect of the demand for service tax for the period from 16 -6 -2005 to 31 -3 -2006 and extended period has been invoked. Appellant himself had obtained registration on 1 -4 -2005 and surrendered it on 3 -6 -2005 and therefore it cannot be said that appellant had suppressed the fact of his providing the service to the clients. He also submits that the amendment carried out was only addition of the words supply of and the appellant genuinely felt that there was no change as far as he was concerned in view of the nature of the contract which he had entered into with the client companies.