Appellate Tribunal upholds service tax demand for service receiver in manpower supply case.

The Appellate Tribunal upheld a service tax demand of &8377; 59,87,946 against the appellant as a service receiver for employees deputed by a foreign company under "Manpower Supply Services." The Tribunal found that the employees were considered to be provided as a service by the foreign company based on the agreement and payment structure, leading to a directive for the appellant to deposit the demanded amount within six weeks to avoid recovery during the appeal process. Compliance would result in a waiver of pre-deposit for the remaining dues.

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Issues:
Service tax liability under "Manpower Supply Services" for employees deputed by a foreign company.

Analysis:
The Appellate Tribunal confirmed a service tax demand of &8377; 59,87,946 against the appellant as a service receiver for employees deputed by a foreign company. The advocate argued that the employees were actually the foreign company's own employees, not a service, citing a previous case where the Tribunal granted waiver of pre-deposit and stay against recovery. The Tribunal examined the sample agreement and noted that the assignment letter was issued by the foreign company abroad, indicating that the foreign company provided "manpower supply service." The agreement stated that salaries were paid from the employees' home location, showing a connection to the foreign company. The Tribunal's previous stay order also highlighted that salaries were paid by the foreign companies, and there was no exclusive employer-employee relationship maintained by either the Indian or foreign company. While the previous stay was granted on limitation grounds, the current demand fell within the normal period, leading to a directive for the appellant to deposit the entire demanded amount within six weeks. Compliance would result in a waiver of pre-deposit for the balance dues and a stay against recovery during the appeal's pendency.

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