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2018 (4) TMI 1041 - AT - Service TaxMan Power Supply or Recruitment Agency service - employees of the appellant would be sent either to such software companies’ premises or to the premises of the ultimate clients for provision of software services at the client’s premises - Department took the view that appellants are only supplying man power to TCS in Special Economic Zones and other similar organizations as per the requirements and that the appellants are not engaged in development of any software on their own but are only providing employees to TCS and other organizations. Held that: - the appellants were only providing manpower, albeit those having software technology skills, to organizations like TCS, Infosys etc. But the information technology development was not done by the appellant themselves nor was it contracted to them - the issue in the appellant own case Future Focus Infotech India (P.) Ltd. Versus Commissioner of Service Tax [2010 (3) TMI 190 - CESTAT, CHENNAI], applies, where it was held that the appellant was supplying skilled manpower for which it was liable to pay service tax for supply of manpower services. The facts in the case of Cognizant Tech. Solutions. [2010 (3) TMI 328 - CESTAT, CHENNAI] are different and will not apply to present case, as in that case Cognizant Tech. Solutions were themselves responsible for the development, information technology software etc., whereas in the present case appellants are only supplying man power to TCS in Special Economic Zones and other similar organizations as per the requirements and that the appellants are not engaged in development of any software on their own. The appellants are therefore liable for discharging tax liability on the value of taxable services in respect of these services. In respect of services provided to SEZ units - As per the overriding effect of Section 26 & 51 of the SEZ Act 2005 read with Rule 10 of SEZ Rules 2005, they would be eligible for exemption from payment of service tax and also for the exemption extended in Notification No.4/2004-ST dt.31.03.2004 - The adjudicating authority has not considered this claim of the appellant on the ground that sufficient documents have not been produced by the appellants - it is proper to remand the issue for reconsideration - matter on remand. Extended period of limitation - demand raised on TDS by way of a second SCN - Held that: - Nothing could have prevented the department from including the demand on the TDS portion in the earlier SCN dt. 26.9.2009. Hence that part of the impugned order confirming the service tax demand of ₹ 10,52,160/- with interest and imposition of penalties in respect of TDS portion, for the period April 2007 to March 2008, will require to be set aside. Penalties - Held that: - the issue in dispute is with regard to classification of the activities of the appellant and therefore an interpretational issue - all penalties set aside. Appeal disposed off.
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