TaxTMI 
TaxTMI 
2019 (1) TMI 323
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....ant by deputing personnel to M/s. Infosys and other client locations to work on client project, the Manpower deputed worked under the overall supervision of their clients; that the deputed Manpower also performed such other functions as may be called upon to do from time to time; that for rendering these services, appellants are paid a professional/service fee by M/s. Infosys/other clients as agreed upon in terms of the agreement. The Department also took the view that in such cases, the appellants are not engaged in development of any software on their own but are only providing Manpower which is utilized by the software companies for development, implementation and maintenance of software projects. 2.2 It also appeared from audit that appellants had availed CENVAT Credit of service tax paid on services like Staff Insurance, Travels and Catering Services towards payment of service tax on output service; that however, the above said services were not used for providing output services and are not eligible input services. 2.3 Accordingly, a Show Cause Notice dated 05.06.2009 was issued to the appellants inter alia proposing demand of service tax liability of Rs. 95,68,100/- to....
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....o defend the same effectively. Any vague and general notice is not sustainable in law. They relied on the following decisions: • Delta International Ltd. Vs. C.C. - 2012 (281) E.L.T. 400 (Cal.) • Rajmal Lakhichand Vs. C.C. - 2010 (255) E.L.T. 357 (Bom.) (v) The lower authority has without application of mind merely confirmed the demand proposed in the SCN without going into the workings, taxable value, client-wise details, nature of service rendered, etc. The lower authority has ignored the export of service, software development by appellant at their premises, projects undertaken by appellant for M/s. Yahoo, M/s. HP based on specific orders which is duly reflected in the purchase order. (vi) In terms of the decision of this Tribunal in M/s. Cognizant Tech Solutions Vs. C.S.T. - 2010 (18) S.T.R. 326 (Tri. - Chennai) if the projects are identifiable and if there is evidence of the appellant/assessee developing software/IT services, the same is not taxable under manpower supply. (vii) It is settled law that demand of tax made on the basis of ledger accounts/balance sheet is not sustainable and the demand is liable to be set aside. They relied on the....
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.... Show Cause Notice and their contention that the split-up details of the demand is not provided, is incorrect. He relied on the decision in the case of M/s. Future Focus Infotech Pvt. Ltd. Vs. Commissioner of Central Excise (ST), Chennai-IV vide Final Order No. 41108/2018 dated 27.02.2018 to argue that the very same issue in the present appeal has been decided by the Tribunal in which it was held that such activities are exigible to service tax under the category of Manpower Recruitment Services. 5. Heard both sides and have gone through the facts. 6. From the facts on record it is seen that the appellant had supplied personnel to M/s. Infosys and other clients as per requirements of the latter. These personnel are utilized for development, enhancement, implementation and maintenance of software projects. It is also pertinent to note that such development, enhancement, etc., of software is not assigned to the appellants themselves, but is done only by M/s. Infosys and the other clients. No doubt, the personnel so supplied may well be qualified software personnel. Nonetheless, once such personnel have to function under the overall supervision, control and management of the cli....
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.... services." 7.2 We find that the facts of this appeal are pari materia with that of M/s. Future Focus Infotech India Pvt. Ltd. Appeal No. ST/247/2010 wherein Final Order No. 41108/2018 dated 27.02.2018 had been passed by us. Hence, on merits, we do not find any case for the appellants, with regard to demand under the category of Manpower Supply Services. 8. The Ld. Counsel for appellant has argued on the ground of limitation also. It is pointed out by him that in M/s. Cognizant Tech Solutions - 2010 (18) S.T.R. 326 (Tri. - Chennai) the Tribunal had held that such activities of supply of qualified personnel would not amount to Manpower Recruitment and Supply Services. The appellants were under the bona fide belief that the activity did not fall under this category and were not collecting service tax. Later in the case of M/s. Future Focus Infotech Pvt. Ltd. (supra) decided on 27.02.2018, the Tribunal distinguished the decision laid in M/s. Cognizant Tech Solutions (supra) to hold that when the supervision and control of the work executed by such deputed persons is with the clients, the activity would fall under Manpower Supply Services. Indeed the issue is an interpretational ....
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....export of services to overseas clients and other professional services. It has not been clarified in the Show Cause Notice or even at the stage of the stay petition before this Tribunal as to whether the value taken for working out the tax liability includes all these streams of income. It is also not clear as to whether any tax exempt streams of income, for example, say, in relation to export of services, have also been included in the said valuation or not. We find that at the stage of issue of the Show Cause Notice itself, the appellants had flagged their inability to find out as to which transactions with clients are liable to service tax from the various streams of income reflected in the books of accounts vis-à-vis the value adopted in the Show Cause Notice. 11. We therefore find merit in the contention of the appellants that the adjudicating authority has confirmed the demand on the value of Rs. 8,08,32,487/- with a cursory examination of contracts for a value of Rs. 2,74,05,187/- only mechanically, without examining the factual position and without appreciating the argument conveyed by the appellants about the lack of clarity in working out the tax liability. Thou....