Adiraj Manpower Services Pvt ltd Vs CCE Pune II
Forum-Supreme Court of India
Date-18-02-2022

Sub-Whether services provided are man power services or job work services so as to be exempted under the relevant notifications issued under Finance Act, 1994.

The Supreme Court in this case was dealing with the question whether the appellant in this case had provided job work services which were exempted in terms of Serial No 30(c) Notification No 25/2012 dated 20th June, 2012 issued under Finance Act, 1994 or man power services which were fully taxable. The Court relying on the agreement entered into between the parties by observing that there is a complete absence in the agreement of any reference to:

(i) the nature of the process of work which has to be carried out by the appellant;
(ii) provisions for maintaining
(a) the quality of work;
(b) the nature of the facilities utilised; or
(c) the infrastructure deployed to generate the work;
(iii) the delivery schedule;
(iv) specifications in regard to the work to be performed; and
(v) consequences which ensue in the event of a breach of the contractual
obligation.

The absence of the above terms and conditions which are determinative of the nature of the services which are performed, led the court to dismiss the appeal by holding that the appellant was trying to camaflouge the agreement as Job work agreement and thus was liable to pay the service tax.

This judgement will be helpful in similar disputes where the job work services or man power services are subject matter of dispute.

Ramesh Patodia
20-02-2022