2019 (1) TMI 512

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....11 and 2011-12 on the consideration received by M/s Sawrupanand Enterprises as provider of 'manpower recruitment or supply service' to M/s Asahi India Glass Ltd and M/s Finolex Industries in proceedings initiated in two show cause notices for the two periods. The penalties imposed under section 76, section 78 and other penal provisions of Finance Act, 1994 were also challenged. 2. The first appellate authority accepted the plea of the appellant therein that activities till September 2010 were not taxable as the agreements were clearly for execution of jobs contracted by the clients without any reference to deployment of manpower. Concluding that the activity from October 2010 was, admittedly, that of 'manpower recruitment or supply service....

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....otice invoked the extended period by alleging the existence of ingredients that justified invoking proviso to section 73(1) and section 78 of Finance Act, 1994 which was confirmed in the order-in-original. The impugned order has rendered a clear finding that these ingredients are not present before going on to confirm the demand for a part of that which was proposed initially. No appeal against the dropping of penalty under section 76 by the original authority was preferred before the first appellate authority; the point of no return was, thus, crossed on that proposal in the show cause notice with the issue of adjudication order. It would appear that that the first appellate authority has substituted the penalty as a compensatory measure. ....

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....cise, Jaipur-II [2017 (7) GSTL 478 (Tri-Del)], Dhanashree Enterprises v. Commissioner of Central Excise, Pune-I [2017 (5) GSTL 212 (Tri-Mumbai)] and DS Chavan Engineering Works v. Commissioner of Central Excise & Customs, Nasik [2015 (40) STR 1150 (Tri-Mumbai)]. In the light of this consistent stand of the Tribunal that the scope for taxation as provider of 'manpower recruitment and supply service' is limited to supply of manpower as evidenced in the agreement, the impugned order cannot be faulted for having dropped the demand for the period upto September 2010. 6. The only issue that remains is the eligibility for deduction of expenditure incurred on salary and wages, provident fund etc. for providing the taxable service from October 2010....

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....icient to evince that the appellant acted as a recruiting agent for the clients. It is also not the claim of the appellant that the amount received is not at variance with the amount paid to, and on behalf of, employees. It is clear from the 'job order' that appellant is responsible for discharge of all statutory requirements devolving on an employer. In this situation, the requirements enumerated in rule 5(2) of Service Tax (Determination of Value) Rules, 2006 have not been complied with as found in the order of first appellate authority. The proposition that rule 5(2) has no existence except in conjunction with rule 5(1) of Service Tax (Determination of Value) Rules, 2006 is not convincing as the condition precedent, i.e. 'subject to' doe....