2018 (9) TMI 1729

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.... during 2005-06 and 2006-07, however had not discharged service tax liability thereon. It was noticed that assessee had deputed manpower to their clients during 2005-06 and 2006-07 and realized deputation charges from them. Department took the view that service tax is required to be paid on such activity under MRSA, hence show cause notice dt. 28.05.2010 was issued inter alia, proposing demand of Rs. 20,42,314/- being service tax amount not discharged by the assessee during 2005-06 & 2006-07 with interest thereon, along with imposition of penalties under Section 76, 77 & 78 ibid. In adjudication, the original authority vide an order dt. 04.10.2010 however confirmed demand to the extent of Rs. 18,23,910/- with interest thereon imposed equal ....

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.... is not clear; that while the Commissioner (Appeals) has allowed the appeal as time-barred, has however directed to settle the tax under Section 73 (3) of the Act. The department has filed Appeal ST/228/2012 against setting aside part of the demand and setting aside of penalty under MRSA service by the Commissioner (Appeals). 3. Today when the matter came up for hearing, on behalf of the assessee, Ld. Advocate Ms. Nancy made oral and written submissions which can be summarized as under : i) They have deputed the employees to their sister concern or units and collected deputation charges from the latter. Therefore, the services rendered by them do not fall under the category of Man Power Recruitment Agency and Supply service. ii) The ass....

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....d cover within its sweep range of activities provided therein. However, in the present case, such definition would not cover the activity of the respondent as rightly held by the Tribunal. To recall, the respondent in order to reduce his cost of manufacturing, deputed some of its staff to its subsidiaries or group companies for stipulated work or limited period. All throughout the control and supervision remained with the respondent. As pointed out by the respondent, company is not in the business of providing recruitment or supply of manpower. Actual cost incurred by the company in terms of salary, remuneration and perquisites is only reimbursed by the group companies. There is no element of profit or finance benefit. The subsidiary compan....

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....tting aside the demand in respect of employees deputed by the assessee to the group companies. 6.3 In the event, no merit is found in respect of the grievance of the Department regarding setting aside by LAA of the demand under MRSA in respect of services provided by assessee to group companies. In any case, the disputed amount that was before the LAA is only to the tune of Rs. 18,23,910/- and hence department's appeal against such order will not be in keeping with the litigation policy vide Board's instruction being F.No.390/Misc./1116/2017-JC dt. 11-07-2018. which prescribes monetary limit of Rs. 20 lakhs for filing of appeal before this forum. For all these reasons, the Appeal ST/228/2012, filed by the department is dismissed. 6.4 Comi....