TaxTMI 
TaxTMI 
2015 (11) TMI 1355
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....automotive dealerships, health services and alternate energy. Various companies in the group are Muthoot Fincorp Limited, Muthoot Capital Services Limited, MPG Hotels and Infrastructure Ventures (P) Ltd. The appellant (MPCMS) was formed as a core group to manage various establishments of the group. The firm is the central management establishment of MPG and provides advice and consultancy in areas like finance, legal, personnel, technical etc as emerging from the Partnership Deed. MPCMS also has control over entire manpower of group companies. While MPCMS provided such services to all the entities, they had a separate agreement with MFL which provided for payment of administrative charges for the services rendered by MPCMS. Taking a view th....
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....taff to other entities would be covered under the definition of manpower supply and the motive for providing such manpower is of no consequence. MPCMS and the group companies to whom they are supplying manpower are different legal entities and the activity cannot be termed as service to self. RPG Enterprise Ltd. v. CCE, Mumbai IV - 2008 (11) STR 488 3. The learned counsel on behalf of the appellant made the following submissions: A. Organizational set up Muthoot Pappachan Group (MPG) is a group of establishments which undertake diversified businesses such as financial services, hospitality, real estate, automotive dealerships, health services and alternate energy. Various establishments are: • Mu....
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....ntity to another. MPCMS coordinates the recruitment, placement, training and several other matters. This ensured a large employment base of the MPG and thus better labor incentives for the employees. MPCMS is an association of the group companies who come together to work for and among themselves and for the benefit of MPG. The activities of MPCMS was more in the nature of co-ordination between establishments and intended to provide administrative convenience rather than to supply manpower, as I clear from the Agreement between MPCMS and MFL which is the biggest of the group companies. C. Persons are employed with the group companies under their control and supervision In most of the cases, emplo....
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....ST, Mumbai-I, 2015-TIOL-298-CESTAT-MUM • Commissioner of Service Tax V. M/s. Arvind Mills Ltd. reported in 2014-TIOL-441-HC-AHM-ST Only with respect to M/s. Muthoot Fincorp Ltd., the appellant has entered into an Agreement to co-ordinate the recruitment of employees for an additional Administrative Charges. These charges are not a consideration for MSA service but are received in order maintain the gratuity reserves, administrative expenses and legal compliance. Administrative charges were given for a host of consultancy service to be provided by the appellant such as financial, legal, personnel, technical, technological etc. Even if these administrative charges were deemed to be consideration for the....
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.... of the MPG companies paid through cash, i.e. Rs. 10,65,01,370/- (Rupees Ten Crores Sixty Five Lakhs One Thousand Three Hundred and Seventy only) could have been discharged through credit. "In this factual background, confirming the demand would only result in a revenue neutral situation. • Daman Ganga Board Mills Pvt. Ltd. V. CCE, Vapi - 2012 (276) E.L.T. 532 (Tri.-Ahmd.) • GE BE Pvt. Ltd. V. CCE - 2011-TIOL-1410-CESTAT-BANG F. Extended period cannot be invoked in a revenue neutral situation. G. Since the activity is not taxable, no interest can be demanded and no penalty can be levied. 4. On the other hand learned AR would submit that according to the agreement, the manpower is to be....
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....clause alone would show that as claimed by the learned AR, according to the agreement the activity is one of Manpower Supply. However it was submitted during the course of the hearing that the activities of MPCMS was more in the nature of coordination between establishment and for administrative convenience and not for supply of manpower. It was also submitted that no service charges were billed to the other companies in the group. It was also submitted that the recruitment, selection were all done by the group companies themselves and the advertisement is also given by the recipient companies only. ID cards were also issued by the recipient companies. It was also submitted that at best, service tax may be levied on administrative charges c....