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TMI Blog2018 (1) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant will be outside the scope and purview of Service Tax under the category of manpower recruitment or supply agency service. CENVAT credit - demand for non-maintenance of separate records in terms of Rule 6 (3) ibid - Held that: - own trading of securities cannot be termed as exempted service and accordingly, the provisions of rule 6 (3) ibid will not applicable for maintenance of separate records/accounts. The present finding is only on this limited aspect of application of Rule b (3). The basic issue as to whether the Cenvat Scheme itself is applicable to such trading has not been a dispute examined in the proceedings. Penalty on Cenvat Credit of Input Services reversed during adjudication - sub-rule (3) of Rule 15 ib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18,00,256/- c. Penalty on Cenvat Credit of Input Services reversed during adjudication Appropriated 38,43,470/- 2.1 With regard to service tax demand against manpower recruitment or supply agency service, ld. Advocate appearing for the appellant submits that the staff deputed by the appellant to its associated enterprises are employees of the appellant and the appellant is receiving consideration towards such services in the form of reimbursement for the out sourced personal. He submits that mere sharing of the staff amongst group companies and reimbursement of costs does not amount to rendering of any taxable service. He further submits that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is prior to the date of amendment. 2.4 To support the above submissions, the ld. Advocate has relied on the judgement of Hon ble Gujarat High Court in the case of Commissioner of Service Tax Vs. Arvind Mills Ltd. - 2014 (35) S.T.R. 496 (Guj.), Krohne Marshall Pvt. Ltd. vs. CCE, Pune 2015-TIOL-2860-(Mum.), CCE Vs. Fosroc Chemicals India Pvt. Ltd. 2016 (42) STR 28 (Tri.). 3. On the other hand, the ld. D.R. appearing for the respondent reiterates the findings recorded in the impugned order. 4. Heard both sides and perused the case records. 5. Section 65 (68) of the Finance Act, 1994, as amended, defines Manpower Recruitment or Supply Agency as follows:- From 16.06.2005 to 30.04.2006:- manpower recrui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant is engaged in the business of providing securities, broking advisory service to its client. It never provides any manpower recruitment or supply agency service in the course of its business or commerce. In the case in hand, the appellant received the consideration towards deputing its staff members to the associate enterprises in the form of re-imbursement of expenses towards its members. Since the appellant is not a professionally manpower supply agency and merely sharing the staff amongst the group companies and got the reimbursement of cost from such associate company, the same should not be considered as rendering of the taxable service for the purpose of levy of service tax. Further, there is no relationship between the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ursed by the group companies. There is no element of profit or finance benefit. The subsidiary companies cannot be said to be their clients. Deputation of the employees was only for and in the interest of the company. There was no relation of agency and client. It was pointed out that the employee deputed did not exclusively work under the direction of supervision or control of subsidiary company. All throughout he would be under the continuous control and direction of the company. 6. We have to examine the definition of Manpower Supply Recruitment Agency in background of such undisputable facts. The definition though provides that Manpower Recruitment Supply Agency means any commercial concern engaged in providing any services direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... securities cannot be termed as exempted service and accordingly, the provisions of rule 6 (3) ibid will not applicable for maintenance of separate records/accounts. The present finding is only on this limited aspect of application of Rule b (3). The basic issue as to whether the Cenvat Scheme itself is applicable to such trading has not been a dispute examined in the proceedings. 8. In this case, the impugned order has imposed penalty under sub-rule (3) of Rule 15 ibid. The said sub-rule providing for imposition of penalty on the input service was inserted on 30.12.2006 vide Notification No.31/2006-CE (NT). In the present case, since the dispute relates to the period 2005-06 to 2009-10, which is prior to the date of amendment of Rule 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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