Mere deputation to group companies is not enough for manpower supply tax; corporate structure must be verified before levy.

Mere deputation of employees to group companies against remuneration does not, by itself, establish taxable Manpower Recruitment and Supply Agency Service; liability depends on whether a genuine service provider-service recipient relationship exists on the facts. The tribunal held that the corporate constitution of each entity and the shareholding pattern of the recipient companies had to be examined before fastening the levy. As these foundational facts were not properly verified, the matter was remanded for de novo adjudication with fresh factual and legal examination, and the appeal was allowed to that extent.

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Issues: Whether deputation of employees to group companies against remuneration during the relevant period constituted Manpower Recruitment and Supply Agency Service under Section 65(105)(k) of the Finance Act, 1994, and whether the matter required remand for fresh examination of the corporate constitution and shareholding pattern of the recipient entities.

Analysis: The demand had been confirmed on the footing that employees were deputed to group companies. The reasoning accepted that merely describing entities as group companies is insufficient to determine whether a service provider and service recipient relationship exists. The corporate constitution of each entity and the shareholding pattern had to be ascertained to determine whether the recipient companies were in fact subsidiaries or otherwise related in a manner attracting the levy. Since the adjudicating authority had not examined these foundational facts, the matter could not be finally decided on the existing record.

Conclusion: The dispute was remanded for de novo adjudication after examining the facts and the applicable legal position, and the appeal was allowed to that extent.

Final Conclusion: The levy and consequential demand were not finally affirmed or set aside on merits, and fresh adjudication was directed after proper factual verification.

Ratio Decidendi: A mere reference to group companies does not by itself establish taxable manpower supply; the existence of a service provider and service recipient relationship must be determined from the actual corporate constitution and shareholding structure before liability can be fastened.

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