The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the activities of loading and unloading of scrap, sorting, breaking, cutting, and casting of brass scrap into foundry and processing and packing of brass rods amount to manufacture and not amount to manpower recruitment agency service. Roopsinh Jodhsinh Chauhan, the appellant assessee is engaged by Rajhans Metals Pvt. Limited for undertaking activities of loading and unloading of scrap, sorting, breaking, cutting, and casting of brass scrap into the foundry, and processing and packing of brass rods/ section post manufacturing activity.
As per the terms of contract/ agreement, the assessee was engaged as a worker of Rajhans Metal Pvt. Limited for carrying out the processing of goods on behalf of their principal service recipient namely Rajhans Metal Pvt. Limited for helping in manufacturing of various types of brass articles which were further cleared on payment of Central Excise duty by Rajhans Metal Pvt. Limited.
The assessee appealed against the order passed by the adjudicating authority for confirming the service tax demand on the service category of manpower recruitment agent services or supply agent service. Jigar Shah and Amber Kumrawat, the counsels for the assessee contended that the assessee’s activities amount to manufacture and do not amount to service of Manpower Recruitment Agency Service. Anoop Kumar Mudvel, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was liable to pay the demand.
The Bench observed that in the case of Abbas Mussa Proprietor vs. CCE & ST, Rajkot, the court held that when the contract between the service provider and service recipient was admittedly of contract manufacturing in such case demand under manpower supply cannot be made. The two-member bench comprising Somesh Arora (Judicial) and C L Mahar (Technical) held that activities of loading and unloading of scrap and processing of brass rods fall under manufacture and do not amount to manpower recruitment supply agent service.