Employer-employee relationship and deputed staff payments do not automatically establish manpower supply service for pre-deposit purposes.

Where deputed personnel are prima facie functioning as employees of the recipient entity, routing part of their remuneration through the foreign parent company does not, by itself, establish manpower supply service. The available record and the Board circular indicated that an employer-employee relationship may take the arrangement outside service tax on manpower supply, so the issue required fuller examination at the appeal stage. On that basis, the tribunal found a prima facie case, waived the pre-deposit requirement, and stayed recovery of the disputed dues pending disposal of the appeal.

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Issues: Whether the amount paid through the foreign parent company for deputed staff could be treated, prima facie, as consideration for manpower supply service so as to require pre-deposit of the service tax demand.

Analysis: The persons deputed from the parent company appeared, on the available record, to be functioning as employees of the appellant during the relevant period. Routing part of their remuneration through the parent company, by itself, did not conclusively establish manpower supply service, particularly in view of the Board circular indicating that where an employer-employee relationship exists, manpower supply taxation is not attracted. The matter therefore required detailed examination at the appeal stage, and the existence of a prima facie case justified dispensing with the pre-deposit requirement.

Conclusion: Pre-deposit was waived and recovery of the disputed dues was stayed pending disposal of the appeal.

Final Conclusion: The appellant obtained interim relief against coercive recovery, and the appeal was permitted to proceed without pre-deposit.

Ratio Decidendi: Where deputed personnel are prima facie employees of the recipient and no additional consideration is shown to flow to the parent company, routing salary payments through the parent company does not, by itself, establish manpower supply service for purposes of insisting on pre-deposit.

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