9911796707
TMI Blog2008 (12) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... owards service tax and Rs. 5,17,586 towards education cess, applicable interest on the above amounts, imposed a penalty of Rs. three crores on Focus under section 78 of the Finance Act, 1994 ('the Act') and penalty for delay in payment of the duty due under section 76 of the Act. 2. Focus is registered with the service tax department as a 'Manpower Recruitment and Supply Agency' (MRSA). They have a pool of highly skilled engineers specialized in development, enhancement, implementation and maintenance of software projects. Focus is engaged in development of software for its clients. During the period 16-6-2005 to 31-3-2006, Focus made the services of their engineers available to M/s. Tata Consultancy Services Limited (TCS) and M/s. Infosys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable during the material period in terms of section 65(105)(g) of the Act. The case of the revenue is that Focus had provided manpower to work for the two infotech companies as per their requirement. They were utilized by the IT majors for development, implementation and maintenance of software projects of their clients. They were not engaged in providing technical assistance in the discipline of computer software engineering. Focus was thus liable to pay service tax under the head 'MRSA'. 5. We find that the personnel who rendered services to Infosys and TCS were entrusted with the work of providing software services in the form of various deliverables to their (IT majors) clients under specific task orders given from time to time. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is based on person-day rate mutually agreed. From the invoices available on record we find that the infotech companies were charged for professional charges towards programming support rendered by different personnel on the establishment of the appellants on man-month basis (TCS) or man-day (Infosys) basis. Revenue has no case that during the material period, transactions between Focus and TCS/Infosys were on terms other than those in the contracts entered into in 2007. We find that the manpower kept at the disposal of both Infosys and TCS engaged in software development and maintenance which can be correctly described as engineering consultancy in the discipline of computer software engineering. It is seen from the invoices raised by F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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