2019 (7) TMI 772

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....department observed that the appellant has paid tax, on the expenses as were being paid by them to the Japanese experts/expatriates, who were deputed in their premises by their holding company M/s Yamaha Motors Company, Japan under reverse charge mechanism. Department formed an opinion that the said deputation amounts to supply of manpower supply service. Hence, a Show Cause Notice No. 193/2013 dated 11.12.2013 was served upon the appellants proposing the recovery of service tax not paid by them during the period from 1.4.2012 to 31.3.2013 along with the interest that is of appropriate rate and the proportionate penalty. The said proposal was confirmed vide the Order No. 013 dated 30.6.2016. Being aggrieved thereof, that the present appeal ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....hile justifying the impugned order has laid down the emphasis upon the paragraphs 20.5, 20.6, 21.1, 21.2 and 22.1 of the impugned order. It is impressed upon that the Department's Circular No. 354/127/2012-TRU dated 27.7.2012 which clarifies that the cases of secondment arrangement where certain staff belonging to an organisation is placed at the disposal of a subsidiary company, will be covered by the definition of manpower supply. Accordingly, there is no infirmity in the order. Appeal is, therefore, prayed to be dismissed. 5. After hearing both the parties and considering the entire record, we are of the opinion as: For the demand relating to the period from 1 April, 2012 to 1 July, 2012 i.e. pre negative list period: The definition o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....llant itself. Appellant only is disbursing the Provident Fund contributions and is also deducting tax at source. These observations are sufficient to corroborate the above observations of the impugned arrangement between the appellant and the Japanese experts to be that of a service and to not to be of manpower supply service. The circular as relied upon by the department is perused to be a draft circular. There is nothing on record about the same being ever notified. Thus, we are of the opinion that the adjudicating authority below has definitely committed an error while relying upon the draft circular. 7. For the post negative list period: Section 65B(44) of Finance Act 1944 comes to the rescue of the appellant which reads as follows: ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....xable service involving the recruitment or supply of manpower was provided by a manpower recruitment or supply agency. Unless the critical requirements of clause (k) of Section 65(105) are fulfilled, the element of taxability would not arise." 9. The Hon'ble High Court Gujarat in the case of Commissioner of Service Tax Vs. Arvind Mills Ltd. - 2014 (35) STR 496 has held that even if the actual cost incurred by appellant in terms of salary remuneration and perquisites is only reimbursed by group of companies, there remains no element of profit or finance benefit. The arrangement is that of the continuous control and the direction of the company to whom the holding company has deputed the employee such as an arrangement is out of the ambit to....