2018 (12) TMI 1037

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.... records of M/s. LAP Ross Engineering Ltd., a subsidiary of the appellant, it was noticed by the Officers of the Department that the appellant had rendered Manpower Supply Service to them and collected Deputation Charges for the above said service during the period from 16.06.2005 to 31.03.2007, however without payment of service tax thereon; that they had only started paying service tax for 01.04.2007 from March 2009. 2.2 A Show Cause Notice dated 02.09.2010 was issued to the appellant proposing to demand service tax to the tune of Rs. 16,47,551/- along with applicable interest and penalty. The above proposals came to be confirmed by the adjudicating authority vide Order-in-Original dated 23.09.2011. Thereafter, the appellant preferred ....

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.... integra. The Hon'ble High Court in the case of CST Vs Arvind Mills Ltd. - 2014 (350) STR 496 (Guj.), has held that subsidiary companies cannot be said to be client of holding company and the deputation of employees was only for and in the interest of the company; there is no relation of agency and client. The relevant portion of the said judgment is reproduced as under : "5. It is true that in the present form, the definition of Manpower Supply Recruitment Agency is wide and would 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 manufactur....

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....tly or indirectly supplying recruitment or manpower temporarily or otherwise. However, fundamentally recruitment of the agency being a commercial concern engaged in providing any such service to client would have to be satisfied. In the present case, facts are to the contrary." 6.2 Respectfully following the ratio already laid down, we hold that in respect of employees deputed by the assessee to their group companies we do not find any infirmity in the decision of the Commissioner (Appeals) setting 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....