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TMI Blog2019 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... nor post negative list, Service Tax could not be levied on deputation of employees from a group company in Japan to the Appellant in India. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 52990 of 2016 - FINAL ORDER NO. 50949/2019 - Dated:- 24-7-2019 - MR. JUSTICE DILIP GUPTA, PRESIDENT And MR. BIJAY KUMAR, MEMBER (TECHNICAL) Shri Narender Singhvi, Advocate for the Appellant Shri Vivek Pandey, Authorised Representatives of the Respondent ORDER JUSTICE DILIP GUPTA : This appeal seeks to assail the order dated 23 August, 2016 passed by the Commissioner of Central Excise by which the Service Tax demand has been confirmed and penalty has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Neemrana as per the CRA. A show cause notice dated 15 October, 2015 was, therefore issued to the appellant with respect to the period in dispute. The show cause notice proposed demand of Service Tax under Manpower Supply Services under a reverse charge mechanism with interest and penalty. The appellant submitted a detailed reply to the show cause notice. However, the Commissioner confirmed the demand that has been impugned in this appeal. 5. The demand was made under Manpower Supply Services , which was a taxable service prior to 01 July, 2012 under Section 65(68) of the Finance Act, 1994 read with Section 65(105)(k). The said Sections are reproduced below:- 65 (68) manpower recruitment or supply agency m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Counsel for the Appellant submitted that for the period prior to 1 July, 2012, the deputation/secondment of employees was not covered under the aforesaid definition of Manpower Recruitment and Supply Agency and consequently no service tax was payable. It is also his submission that even after 01 July, 2012 no Service Tax was payable by the appellant on the salaries paid by the appellant to its Japanese employee in India as the definition of service under Section 65B (44) excludes provision of service by an employee to an employer in the course of or in relation to his employment. It is, therefore, his submission that the finding recorded by the Commissioner in the impugned order that MCI is providing Manpower Recruitment and Supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. In regard to the demand relating to the period prior to 01 July, 2012 (pre negative list period), the Division Bench observed as follows : 6. Also for the reason that the contract of employment between the appellant and the Japanese experts is clear enough to express that same is a contract of employment/appointment letter calling upon the said experts into the employment of the appellant whose reporting officer has to be employee of the appellant 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eover, such a service has to be in relation to the supply of manpower. The assessee obtained from its group companies directly or by transfer of the employees, the services of expatriate employees. The assessee paid the salaries of the employees in India, deducted tax and contributed to statutory social security benefits such as provident fund. The assessee was also required to remit contributions, which had to be paid towards social security and other benefits that were payable to the account of the employees under the laws of the foreign jurisdiction. There was no basis whatsoever to hold that in such a transaction, a taxable service involving the recruitment or supply of manpower was provided by a manpower recruitment or supply agency. U ..... X X X X Extracts X X X X X X X X Extracts X X X X
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