2016 (8) TMI 500 - AT - Service Tax

Deployment of employees manpower recruitment or supply services employees continued to remain employee of appellant and their salary being provided by appellant - Held that - the service of manpower recruitment or supply agency has to be in relation to the supply of manpower and by professional engaged in the business of supply of manpowers and a mere sending its own employees on deputation to another group companies cannot be held to be a taxable service involving the recruitment or supply of manpower. - Decision in the case Commissioner of Central Excise Vs. Computer Sciences Corporation India Pvt. Ltd. 2014 (11) TMI 125 - ALLAHABAD HIGH COURT followed appeal allowed decided in favor of appellant.

Summary

Issues:
Service tax demand confirmation against the appellant for deputing employees to serve under the Directorate General of Hydrocarbons.

Analysis:
The Appellate Tribunal, with the consent of both sides, decided to proceed with the appeal as the issue was already settled by precedent decisions. The appellant was facing a service tax demand of around 7 crores, along with interest and penalty, for deputing employees to DGH, categorized as "manpower recruitment or supply agency." The employees remained under the appellant's employment, receiving their salaries from the appellant.

The Tribunal referred to judgments by the High Courts of Allahabad and Gujarat, emphasizing that deputing employees to subsidiaries or group companies for specific work or a limited period does not constitute providing manpower recruitment service. The Tribunal cited precedents to support this interpretation, such as the case of Volkswagen India P. Ltd. v. CCE.

The Revenue Department representative acknowledged that the issue was covered by the aforementioned decisions. Consequently, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellant. The early hearing application and appeal were disposed of accordingly.

Overall, the judgment resolved the issue by aligning with established legal interpretations and precedents, ultimately ruling in favor of the appellant based on the specific circumstances and legal principles discussed in the decision.