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2016 (9) TMI 431 - AT - Service TaxTaxability - deputation of employees - Manpower Recruitment and Supply Agency Services - amounts received by the appellant from their associated company for the period 16.06.2005 to 30.11.2008 - appellant providing employees on their payroll to certain associated companies which are having separate legal entities and remuneration to the staff was provided to other associated company was paid by the noticee - Held that - an identical issue was considered by this Bench in the case of Bhaven Desai v. CST 2016 (2) TMI 806 - CESTAT MUMBAI and held in favour of the appellant therein by coming to a conclusion that deputing the staff to their own organization would not fall under the category of manpower recruitment and supply agency services. This view of the Tribunal was also endorsed by the Hon ble High Court of Gujarat in the case of CST v. Arvind Mills Ltd. 2014 (4) TMI 132 - GUJARAT HIGH COURT . It is on record and undisputed that the appellant received only the reimbursement of the actual amount paid by them to their staff in each case would be covered by the judgement of Hon ble High Court of Delhi in the case of Intercontinental Consultants & Technocrats Pvt. Ltd. v. Union of India 2012 (12) TMI 150 - DELHI HIGH COURT . Therefore, in view of the facts and circumstances of this case and the authoritative judicial pronouncements on the issue, we hold that the impugned order is unsustainable. - Decided in favour of appellant
Issues:
Taxability of amounts received by the appellant from associated organizations. Analysis: The appeal addressed an order-in-original dated 28.02.2012 concerning the service tax liability of the appellant for providing employees to associated companies. The lower authorities categorized these services as "Manpower Recruitment and Supply Agency Services" and issued a show-cause notice for the period 16.06.2005 to 30.11.2008. The appellant contested the notice on grounds of merit and limitation. The adjudicating authority upheld the demands and imposed penalties. The appellant argued that they were deputing staff to their entities, governed by statutory provisions. They highlighted previous cases supporting their stance. The Department supported the lower authorities' findings. Upon review, the Tribunal found the issue revolved around the taxability of amounts received by the appellant from associated organizations for deputing staff. It was acknowledged that the appellant deputed staff to associated organizations during the relevant period, with the appellant paying salaries and receiving reimbursement from the associated entities. The Revenue argued this activity fell under "manpower recruitment and supply agency services." The Tribunal disagreed with the Revenue and the adjudicating authority, citing previous cases where similar issues were decided in favor of the appellants. They referenced the High Court's decision in support of their conclusion. Additionally, they noted that the appellant only received reimbursements for actual payments made to staff, aligning with a Delhi High Court judgment. Considering the facts and judicial precedents, the Tribunal deemed the impugned order unsustainable and set it aside, allowing the appeal. In conclusion, the Tribunal set aside the impugned order, ruling in favor of the appellant based on the nature of the services provided and the legal interpretations from previous cases and authoritative judicial pronouncements.
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