Custom, Excise & Service Tax Tribunal
R Ramdadass Contractor vs Rangareddy - G S T on 27 April, 2026
1 Appeal No. ST/27101/2013
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH - COURT NO. - I
Service Tax Appeal No. 27101 of 2013
(Arising out of Order-in-Original No.18/2013-Adjn (Commr) S.T. dated 25.03.2013 passed
by Commissioner of Customs, Central Excise & Service Tax, Hyderabad)
R. Ramadass, Contractor .. APPELLANT
H.No.2-132/4,
Engineer's Enclave,
Chandanagar,
Hyderabad,
Telangana - 500 050.
VERSUS
Pr. Commissioner of Central Tax .. RESPONDENT
Rangareddy - GST GST Bhavan, H.No. 1-98-7-43, VIP Hills, Jaihind Enclave, Madhapur Hyderabad, Telangana - 500 081.
APPEARANCE:
Shri S. Nageswara Rao, Consultant for the Appellant. Shri A. Rangadham, Authorized Representative for the Respondent.
CORAM: HON'BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL) HON'BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL) FINAL ORDER No. A/30253/2026 Date of Hearing: 27.01.2026 Date of Decision: 27.04.2026 [ORDER PER: ANGAD PRASAD] The appellant has filed this appeal against the Order-in-Original No. 18/2013-Adjn (Commr) S.T. dated 25.03.2013 (impugned order), whereby, Learned Commissioner has confirmed the demand of Rs. 1,08,75,965/- (for period October 2006 to June 2011) and Rs. 3,71,101/- (for period July 2011 to December 2011) along with interest and penalties under Section 76, 77 and 78 of the Finance Act, 1994.2 Appeal No. ST/27101/2013
2. The fact, in brief is, that the appellant is engaged in execution of various works contracts for entities such as Bharat Heavy Electricals Ltd., (BHEL) under different agreements.
3. The Department classified the activities under taken by the appellant under "Manpower Recruitment or Supply Agency Services" (MRAS). The case of the Department is that the appellant was supplying manpower, whereas, the appellant contends that the contracts were lump sum / job work contracts and not manpower supply.
4. Learned Counsel for the appellant submitted that agreements are work contract / job contract basis, not manpower supply basis, payment are based lump sum, linked to work out paid, not depends on number of workers.
5. Learned Counsel for the appellant submitted that no any obligation exists to provide manpower to BHEL. It is also submitted that control and supervision remained with the appellant.
6. It is further submitted that mere deployment of labour does not convert the activities into "Manpower Recruitment or Supply Agency Services" (MRAS). Learned Counsel for the appellant further, submitted that there is no suppression of facts or intent to evade Service Tax. The appellant has acted under bonofide belief. Therefore, invocation of extended period is not sustainable as per law.
7. Learned Authorized Representative (AR) submitted that reiterates the findings given by the Learned Commissioner and further submitted that the nature of activity involves manpower deployment, payments include labour components, non-registration and non-filing of returns justify invocation of extended period.
3 Appeal No. ST/27101/2013
8. Heard both the sides and perused the records.
9. The issue is, whether the activities under taken by the appellant fall under "Manpower Recruitment or Supply Agency Services" (MRAS) or otherwise.
10. 'Manpower Recruitment or Supply Agency Services' (MRAS) has been defined under Section 65 (68) of the Finance Act as follows:
"(68) "manpower recruitment or supply agency" means any person engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person;"
11. Learned Commissioner has summarizes agreements between appellant and BHEL as follows which is relevant for determination of the issue:
"18. Sri.R. Ramadass has not disputed the fact that he has received certain amounts from M/s. BHEL during the impugned period for provision of services; that in anticipation of orders from M/s BHEL, he has obtained service tax registration under 'MRAS'; that service tax collected from M/s BHEL during the period from July, 2011 to Dec, 2011 has been credited to the Central Government. But Sri.R. Ramadass has contested that the impugned services rendered by him to M/s BHEL cannot be classified under 'Manpower Recruitment or Supply Agency Service'. However, Sri.R. Ramadass is as to what is the classification of the services rendered by him; Perusal of the agreements enclosed to the reply revealed that Sri.R. Ramdass was engaged in execution of the following works on job contract basis/ work contract based:
(i)to provide services for operations like cutting, shearing, painting, punching and dispatch of raw material like rounds, sheets & Pipes etc., in BHEL, 11 preparatory shop
ii) to provide services for Dak distribution, customer hospitality, house keeping in various departments of M/s BHEL
iii) to provide services for loading/unloading of fuels, lube oils, sludges etc., at 6MW DG power houses
iv) to provide services for breaking of rejected G.Iron castings in F & P
v) to provide services for packing & forwarding of equipments in CDC
vi) Unloading, shifting & stacking of site return, pig iron, foundry, other stores material received through lorries/trailors 4 Appeal No. ST/27101/2013
vii) Requirement of Painters for applying of preservatives, writing of material code, SRV nos and SRV S.No etc., on all incoming materials
viii) Cleaning and material handling preservation of tools and components of pumps
ix) Distribution of files, circulars, notices etc., to various departments, shifting of records, carrying cash boxes and serving Tea etc
x) Material handling work in HE and fabrication shop."
12. On perusal of the above agreement, it is cleared that the work is awarded on lump sum basis, nowhere any specification of member of manpower, payment linked to output, not labour supply and responsibilities of execution of works lies with appellant.
13. The Tribunal Bangalore in the case of Ritesh Enterprises Vs CCE, Bangalore [2010 (18) STR 17 (Tri. - Bang)], held that lump sum work not covered under Manpower Recruitment or Supply Agency Service. In the case of Divya Enterprises Vs CCE, Mangalore [2010(19) STR 438 (Tri.-Bang)] has held that lump sum work contracts not specifying manpower cannot be classified as manpower service. Tribunal Ahmedabad in the case of Rameshchandra C.Patel Vs CST, Ahmedabad [22012(25) S.T.R. 471 (Tri.- Ahmd)] it was held that where agreements are silent on manpower and relate to execution of work, Service Tax under MRAS is not leviable. Relevant para of the judgment as thus:
"4. From the above it can be seen that there are two requirements for determining whether a service is taxable service under the category of manpower recruitment or supply agency. First of all, it should be provided by a manpower recruitment or supply agency and secondly it should be in relation to manpower supply or recruitment. In this case, whether it is in the agreement entered into between the two parties or in the activity undertaken by the appellant which is contract manufacturing, looked into, it is seen that nowhere the question of supply of manpower or recruitment arises. In fact the agreement is totally silent as regards the manpower. It does not have any provision relating to the number of men or labour to be used or the manner in which they have to be used or the quantum of 5 Appeal No. ST/27101/2013 payment to be made to them etc. The department has totally failed to show in which manner the service provided by the appellant can be categorized under manpower recruitment or supply. In the Order-in-Original, the adjudicating authority proceeded on the ground that there was no challenge to the liability of tax at all since the appellant had deposited the amount during investigation. Commissioner (Appeals) in her order simply stated that she agreed with the view of the adjudicating authority and went on to say that appellants had wilfully suppressed the fact of service and appellants failed to pay service tax. Both the authorities have not at all discussed how the service provided by the appellant amounts to service of manpower recruitment or supply. After considering the records, submissions and the orders passed by the lower authorities, I am unable to find any ground on which the appellant can be held liable to service tax on the activity undertaken by them. In the result appellant succeeds and the appeal is allowed with consequential relief to the appellant."
14. Even at the stage of hearing stay application by this bench already observed that "On going through the agreements, we find that several agreements that we perused are for undertaking work and the payment is based on the quantum of work done and not based on quantum of manpower or number of labourers or manpower supplied. In the absence of specific number of men supplied and in the absence of evidence to show that both the parties understood the services to be of a manpower supply on the basis of records, we consider that the demand is not sustainable."
15. Tribunal Ahmedabad in the case of Fitweld Enterprise Vs Commissioner of Service Tax, Ahmedabad [2024 (17) Centax 446 (Tri.-Ahmd)] there was no contract between appellant and recipient of service for supply of number of manpower and charges were not on basis of wages of their manpower deputed. Therefore, activity of appellant did not fall under 'Manpower Recruitment and Supply Agency Service'. The relevant para of the judgment as thus:
"4. On careful consideration of the submission made by both the sides and perusal of record, we find that there is no dispute that there is no contract 6 Appeal No. ST/27101/2013 between the appellant and the recipient of service for supply of number of manpowers and the charges are not on the basis of wages of their man power deputed. As per the facts revealed from the documents, it is clear that the appellant were assigned various engineering jobs, which is provided in or in relation to manufacture of a final product which is cleared on payment of duty by the recipient of service. This Tribunal time and again considered the matters that where the contract is not for manpower supply but for particular job, the service will not fall under 'man power recruitment or supply agency service'. However, since issue involved is mixed of law and facts, in the light of the present fact of the case and the judgments relied upon by the appellant, we are of considered view that the matter needs to be reconsidered by the learned Commissioner (Appeals)."
16. In the present case, agreement clearly demonstrates execution of work and not supply of manpower. The Adjudicating Authority has proceeded merely on the basis that labour was involved, unless, there is specific requirement of labour/ manpower in the agreement, such agreement/ contract may not be classified under "Manpower Recruitment or Supply Agency Services" (MRAS).
17. The extended period has been invoked on the ground of non- registration and non-filing of returns. However, it is well settled that mere non-registration or non-filing of returns does not amount suppression of facts unless intent to evade tax is established. Tribunal Delhi in the case of Subhash Khandelwal & Sons Vs CCE, Jaipur - I [2011 (24) S.T.R.461 (Tri.- Del.)] and Tribunal Chennai in the case of CCE, Tirunelveli Vs Global Software Solutions (P) Ltd., [2011 (24) S.T.R. 707 (Tri.-Chennai)], wherein, it was held that mere non-registration and non-filing of returns is not suppression of fact with an intent to evade tax to invoke the extended 7 Appeal No. ST/27101/2013 period. In the present case, no any positive evidence is available relating to suppression of facts. Therefore, extended period is not invokable.
18. Since, the demand itself is not sustainable, imposition of penalties will not survive. Further, it is settled that simultaneous penalties under Section 76 and 78 are not sustainable.
19. In view of the above discussion the activities of the appellant does not fall "Manpower Recruitment or Supply Agency Services" (MRAS). Therefore, demand is not sustainable on merits and extended period is also not invokable. Thus appeal is liable to be allowed.
20. Appeal is allowed with consequential relief, if any, as per law.
(Pronounced in the open court on 27.04.2026 ) (A.K. JYOTISHI) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) Shirisha