By Puloma Dalal, Jayesh Gogri, Mandar Telang, Chartered Accountants
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Whether contract for manufacturing on job work covered under ‘Manpower Supply Service’? Held, No.
Facts: The Appellant entered into an agreement for engaging 3 persons to carry out manufacturing on job work basis. The respondent argued that the object of the agreement was to provide skilled labourers for carrying out the activity and statutory liability under labour laws was of the Appellant and hence such act comes under the purview of manpower supply.
Held: Observing the agreement, the Hon. Tribunal allowed the appeal holding that the persons employed remained under the control of job worker and not of the service receiver and that there was no objective to provide supply of manpower, without carrying out manufacturing activity. 2013-TIOL-1441-CESTAT-DEL Commissioner of Service Tax, Delhi vs. Pentagon Financial Consultants Pvt. Ltd. Where even a part amount of interest was not paid before the issue of Show Cause Notice, penalty u/s. 76 upheld.
Facts: The Assessee short-paid Rs. 2,36,479/- for which the department issued a Show Cause Notice dated 04-03-2008 along with interest and equal penalty and confirmed the demand thereon. The assessee appealed to the Commissioner (Appeals) and contended that since the whole amount of service tax was paid on 23-04-2007, much before the issue of Show Cause Notice, no penalty u/s. 76 ought to have been levied which the Commissioner (Appeals) ordered in favour. The department, being aggrieved by the order contended that for the waiver of entire penalty, the assessee should have paid the entire service tax along with entire interest. In the instant case, the assessee failed to deposit part amount of interest of Rs. 771/- before the issue of Show Cause Notice and deposited the same on 04-04-2008. Thus, no waiver of penalty should have been allowed.
Held: The Hon. Tribunal observed that full payment of interest was an integral part for waiver of penalty which the assessee did not fulfil. Further, perusing the provisions of section 73 and CBEC Circular No. 137/167/2006-CX4 dated 03-10-2007, the Tribunal set aside the order of the Commissioner (Appeals) and held that the benefit of exemption of penalty could not be given.
