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TMI Blog2014 (12) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... service' and therefore they are liable to pay service tax of Rs. 1,36,23,888/- and they were liable to pay Rs. 27,07,108/- under the head of 'commercial coaching or training service' received by them, proceedings were initiated culminating in confirmation of the demand for service tax with interest and penalties under various Sections of Finance Act, 1994. Even though only application for waiver of pre-deposit and stay against recovery was listed for hearing, the matter was heard for considerable time and several submissions were made. We propose to discuss briefly and limit ourselves to the essential points put forth. 2. On the first issue of 'manpower recruitment or supply agency service', the learned counsel for the appellants submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. The actual amount payable to the employees by the manpower supplier need not necessarily be informed to the receiver of the service. Further at any given stage, the recipient can ask for replacement of the manpower and he does not have to inform the employee about at it at all. 3. Learned AR highlighted these observations of the Bench in the M/s. Deloitte Support Services case and submitted that this case is not similar to Deloitte Support Services at all. He draws our attention to the Authority for Advance Ruling, Income Tax (AAR, IT) and draws our attention to paragraph 7, 8 and 9 which are reproduced below for better appreciation. 7. A sure test to find out whether there exists the relationship of employer and employees is to see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reiterate the reasons given in that Ruling. Suffice it to say that I adopt the reasoning therein to come to a conclusion on the facts of this case and on an interpretation of the agreements that the applicant does not become the employer of the seconded employees and what is paid by the applicant to the US Principal would not be reimbursement of salary but fees for technical services or business profits, depending on a finding on that question. The payment of payroll processing charges cannot also be considered reimbursements. 9. Once it is held that the employees seconded are the employees of the US Principal, then the salaries and other emoluments paid to them by it are out of the obligation inhering in it as the employer. The applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the appellant by US Intel and submits that the words 'ITIPL shall have the right, at any time (emphasis added) to approve or reject the employee selected for transfer to ITIPL' and submits that this includes the power to terminate also. He also submits that there is no additional consideration paid at all to Intel, US. 5. We have considered the submissions made by both the sides. First of all, to apply the decision rendered by the AAR IT to the present case, we have to see whether the facts were similar or not. Ongoing through the order of the AAR IT, we find that in the case under consideration before the AAR IT, 'the employees of the principals seconded to the applicant shall continue to have their pay roll processed by the principa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch favourable view was taken in respect of the assessee, we consider that appellant has made out a prima facie case in respect of these amounts. 5.1 As regards the demands on two other counts, the learned counsel submitted that the appellants have made payments of the entire amount payable. He submits that this was not taken note of by the original authority because the whole demand is based on the expenses in foreign currency incurred by the appellants and heading under which the same has been booked in their accounts. While booking the amount, they have booked the amount under general heads. Appellant themselves have segregated the amounts where service tax was payable and were paying regularly and he was able to illustrate at least in o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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