2017 (10) TMI 406

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.... service started paying service tax w.e.f. 16.5.2008 classifying the services under the category of Manpower Recruitment Supply Agency Services. However, during the period April 2005 to May 2008 though they have deputed their staff to various group companies and collect the charges towards the same, but service tax was not discharged. Accordingly, show cause notice was issued classifying the said service under manpower recruitment and supply agency service which was culminated into adjudication order whereby the demand of service tax raised in the show cause notice was confirmed for period 2005 - 06 to 2007-08 (upto 15.05.2008) penalties under Section 76,77 & 78 of the Finance Act, were also imposed. Being aggrieved by the said impugned ord....

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....ady taken a view. The relevant portion of the order is reproduced below: "5. On consideration of the detailed submissions made by both sides and on perusal of the records, we find that the issue lies in a small and narrow compass, inasmuch as whether the amount paid by the appellant as service tax payable on the amounts received from the sister concern for deputation of employees is correct or otherwise. 6. It is undisputed that the appellant has deputed their own employees to their sister concern and based on accounting entries of recovery of cost of such employees, under misunderstanding of law paid the service tax liability under 'Business Support Service'. The adjudicating authority as well as the first appellate authority....

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....t the issue on the similar facts was agitated before the Tribunal in the case of Arvind Mills v. Commissioner of Service Tax - 2014 (34) S.T.R. 610 (Tri.-Ahmd.) wherein the Tribunal held that deputation of employees to their own sister concern and recovering cost from them, would not amount to rendering of Manpower Recruitment or Supply Agency Service. The said view has been upheld by the Hon'ble High Court as reported in 2014 (35) S.T.R. 496. Since this view has already been upheld by the Hon'ble Gujarat High Court, we find that the said ratio is binding on us as there is no other contrary judgment produced before us. 8. Accordingly, we hold that the service tax paid by the appellant is not liable to be taxed under any category of the s....