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2016 (7) TMI 996 - AT - Service TaxManpower supply services or not - Consequent to the BIFR Scheme, the Lease Agreement was signed between the appellant (PTL) and Apollo Tyres Ltd. (ATL) on May 14, 2005. In the Lease Agreement, it was inter-alia mentioned that in addition to payment of lease rental, ATL will reimburse to the appellant, PTL the actual expenses including the cost of personal. Held that:- even if the appellant (PTL) is called as service provider, we do not find any service recipient in this case as the personnel (manpower), who are manufacturing ATL brand tyres and tubes, continued and continues to be in the pay roll of the appellant (PTL) and from the documents on record, we cannot say that the appellant (PTL) has provided any service in relation to recruitment and supply of manpower in any manner temporarily or otherwise and the appellant company has never been and presently also not in the business of manpower supply or recruitment temporarily or otherwise, in any manner. The appellant has argued that even on the ground of revenue neutrality, they should not be charged any service tax. Revenue has argued that revenue neutrality cannot be a ground for non-levy of service tax, if the activity is otherwise covered under Service Tax law. We do not find any reason to consider this argument of revenue neutrality of the appellant or the counter argument of the Revenue that revenue neutrality cannot be a ground for non-levy of service tax as the subject activities and operations of the appellant have not fulfilled the ingredients of the definition of the manpower recruitment or supply agency service as per the provisions of Section 65 (105) (k) of the Finance Act, 1994, as discussed in earlier parts. The Revenue has tried to make a case to bring the subject activity and operations/transactions of the appellant within the definition of manpower recruitment and supply agency service. However, when facts on the ground and the documents indicate otherwise, the Revenue cannot sustain its case beyond mere statement and it cannot succeed legally. - Demand set aside - Decided in favor of assessee.
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