M/s. Arignar Anna Sugar Mills Versus Commissioner of GST & Central Excise, Trichy
Service Tax
2018 (9) TMI 387 – CESTAT CHENNAI – 2019 (26) G. S. T. L. 54 (Tri. – Chennai)
CESTAT CHENNAI – AT
Dated:- 23-8-2018
Appeal Nos. ST/526/2011 and ST/40938/2013 – Final Order Nos. 42303-42304 / 2018
Service Tax
Hon'ble Ms. Sulekha Beevi C. S., Member ( Judicial ) And Hon'ble Shri Madhu Mohan Damodhar, Member ( Technical )
Shri T. Ramesh, Advocate for the Appellant
Shri K. Veerabhadra Reddy, JC ( AR ) for the Respondent
ORDER
Per Bench
The appellants are engaged in the manufacture of sugar and molasses. They are holding registration for payment of service tax on the services of transport of goods by road in goods carriage. On the basis of intelligence received that the appellants are providing taxable services on manpower recruitment or supply agency service, but not taken registration and are not paying service tax, investigations were conducted. It was revealed that the
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o demand service tax along with interest and for imposing penalty under the category of manpower recruitment or supply agency service. After due process of law, the adjudicating authority confirmed the demand of Rs. 3,54,57,555/- for the period from November 2005 to September 2010 and Rs. 56,37,264/- for the period from October 2010 to March 2011 along with interest and also imposed penalties under Sections 77 and 78 of the Finance Act. Hence these appeals.
2. On behalf of the appellant, ld. Counsel Shri T. Ramesh submitted that the appellant is a public sector undertaking under the Government of Tamilnadu engaged in the manufacture of sugar. The sugar factory is totally controlled by the Government of Tamilnadu and the price of the goods manufactured by the factory is also controlled by the Government. Further, the price of sugarcane procured is also periodically fixed by the Government. The employees of the sugar mill in the muster roll of the mill which in turn is controlled by the
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they are also provided necessary facilities. One of the said facility is to get the farmers registered themselves with the appellant's factory / sugar mill. Though it has become duty bound to supply the sugarcane at the doorsteps of the appellant-factory and appellant agrees to pay the price for such supply as per the price fixed by the Government of Tamilnadu, it is to ensure that there is consistent supply of sugarcane at the time of seasonal period. On receipt of the sugarcane in the factory, the total quantity supplied by such grower would be quantified and the price is paid to them after deducting the labour charges for harvesting the sugarcane. The cutting charges are negotiated by the farmers with the cutting labourers and the appellant has no say whatever in fixing the cutting price of the sugarcane. The farmer alone is liable to pay cutting charges to the labourers and not the sugar mill. To ensure that the sugarcane is harvested and there is regular supply during the period
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.7.2018 in the case of M/s. The Amaravathi Cooperative Sugar Mills Ltd. It is also submitted by him that for the subsequent period for the same assessee, Commissioner (Appeals) had dropped the demand on similar set of facts.
4. The ld. AR Shri K. Veerabhadra Reddy supported the findings in the impugned order.
5. Heard both sides.
6. The demand has been made on manpower supply service alleging that the appellant have supplied manpower to the sugarcane farmers for sugarcane harvesting. The contention of the department that the charges towards supply of cane harvesting labourers are recovered from the farmers at the rate accepted by the farmers and therefore the said activity would be covered within the definition of manpower recruitment or supply agency service under Section 65(68) of the Finance Act, 1994. The appellant has replied to the show cause notice dated 5.4.2011. It is explained by the appellant that there is no employer and employee relationship between the cutting labourer
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