2014 (11) TMI 335

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....ties under various sections of Finance Act, 1994 have been imposed. Show-cause notice was issued on 14.10.2011. 2. The appellants have engaged in the manufacture and marketing of Biscuits. The appellants have outsourced the manufacturing activity of biscuits to various job-workers and the issue before us is in relation to such outsource arrangement entered into by the appellants with J.B. Mangaram Foods Pvt. Ltd. (JBM) vide agreement dated 9.5.2000 for manufacture of biscuits for the appellants. To ensure that quality of biscuits is as per the specification and standards of the appellants the appellants deputed certain personnel to JBM premises to carry out checks on the quality of biscuits manufactured by JBM on their behalf. Salaries o....

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....ar issued under F. No. B1/6/2005-TRU dated 27.7.2005 is misplaced. The circular suggests that personnel should come under the direction and control of the service recipient which is not the situation in the instant case. (v) 'Manpower supply agency service' does not envisage a situation where there is a contract for completing a job ad hoc. As per circular No. 96/7/2007-ST dated 23.08.2007, the impugned service covers such cases where the agreement is for the utilization of the services of an individual, and such individuals are supplied by the agency/person. (vi) The appellants are not 'manpower recruitment or supply agency'. In this context, the relevance of the phrase 'engaged in' has to be understood in the light of the following ....

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....U dated 27.7.2005 which states that the taxable value includes staff costs e.g. salary and other contributions. (x) There is no suppression of facts by the appellants nor an intent to evade payment of taxes. Extended period cannot be invoked and the entire demand is barred by limitation. The department has itself taken a conflicting view on the same transaction and classified it as 'Management or Business Consultancy Service'. (xi) Mere non-payment of service tax does not amount to suppression. No penalty is imposable and no interest is payable since the issue involves interpretation of complex legal position. Further, penalty under both sections 76 & 78 of the Act cannot be invoked simultaneously. (xii) The appellants have assesse....