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2018 (4) TMI 1504 - AT - Service TaxClassification of services - appellants herein, were providing technically qualified employees / man power to IT companies like TCS, Infosys for development of software projects - whether the activities of appellant would fall within the scope of “Manpower Recruitment and Supply Agency Service” or whether it can be said that they provide Information Technology (IT) service? - Held that: - appellant was involved only in supply of man power to TCS, Infosys etc. Such man power may well have been technical personnel and highly qualified in information technology too. But the fact remains that such personnel were only supplied by appellant to Infosys etc. And that they were required to function under supervision of the latter and as per the work allocated by these service recipients. The facts are very much pari materia with the facts of Future Focus Infotech India (P) Ltd.Vs CST Chennai [2010 (3) TMI 190 - CESTAT, CHENNAI], wherein the Tribunal has clearly laid down that appellants therein had undertaken only supply of skilled man power. There is no infirmity in the impugned order concluding that the activity of the appellant would fall within the fold of “Manpower Recruitment or Supply Agency Service” under Section 65 (105) (k) of the Finance Act, 1994. Services provided outside India and to SEZ - Held that: - the contentions of the appellant that services provided to SEZ units would be exempt vide Notification No.4/2004-ST have been brushed aside by the Commissioner - the matter requires reconsideration. Extended period of limitation - suppression of facts - Held that: - The facts came to light only when the department conducted scrutiny of the annual reports, possibly during audit. In such circumstances, the department is fully justified in invoking the extended period of limitation of five years - while the demand has been made from 16.6.2005, for the period 1.4.2005 to 15.6.2005 the demand is erroneous since the impugned Manpower Recruitment of Supply Agency Services was made taxable only w.e.f. 16.5.2005. Penalty - Held that: - benefit of doubt can be given to the appellant that they were under bonafide belief that no tax is required to be deposited by them on the services provided - penalty set aside by invoking section 80. The matter is remanded to the adjudicating authority for recalculation of tax liability, to reconsider the appellant’s submissions in respect of the services provided outside India and accord benefit under the provisions of Export of Service Rules, to consider benefit under Notification No.4/2004-ST - appeal allowed in part.
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