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2021 (2) TMI 1093 - AT - Service TaxClassification of services - Manpower Recruitment or Supply Agency Service or not - period 16.6.2005 to 2007 – 08 - Department was of the view that for the period prior to 2008, as per the agreements entered by the appellant with various clients, the appellants have rendered MRSA services to the clients - appellant claims that the services are nothing but Information Technology Software Services for which they have been paying service tax after 2008 and that these activities will not fall under the definition of MRSA - suppression of facts or not - extended period of limitation - HELD THAT:- it can be seen that the control and supervision of the staff / qualified personnel supplied to the premises of the client (ABN AMRO Bank) is with the appellant (contractor) only. Though certain personnel are supplied to the premises of the client for carrying out work / job of the client, it cannot be said that the activity would fall under MRSA. The discussion in para 12.3 of the order in original indicates that mere supply staff / qualified personnel to premises of client is construed as MRSA by the lower authority which is erroneous. Even if parties agree that consideration will be based on the number of persons employed, what has to be looked into is whether the agreement is to execute the work for the client or merely supply the work force. What has to be examined is the core activity for which the agreement is entered between parties. The clients are not in IT related fields. They need services in the nature of annual maintenance of systems, testing, developing of software etc. The disputed transactions as per agreement do not reflect ingredients required for MRSA. There is no iota of evidence to show that the appellants were rendering MRSA service during the disputed period. On merits, the issue is settled by the decision in the case of Cognizant Tech Solutions [2010 (3) TMI 328 - CESTAT, CHENNAI] where it was held that The assistance in recruitment and imparting of specialized training for the recruited personnel cannot be held against the appellants’ claim that they have not supplied the manpower but have merely recruited and retained the same for providing specialized services to Pfizer utilizing such manpower - The demand under MRSA cannot sustain and requires to be set aside. The Hon’ble High Court has remanded the matter to reconsider the issue on limitation also. The entire demand is raised invoking the extended period. In Coromandel Infotech India Ltd. [2019 (1) TMI 323 - CESTAT CHENNAI], the Tribunal had occasion to consider the issue of limitation when there were two conflicting views on the very same issue. Moreover, in the case before us, apart from bald allegation that the appellant has suppressed facts with intention to evade payment of service tax, there is no positive act brought out before us to establish the allegation of suppression. It is evident that the appellant was all along responding and cooperating with the department. The show cause notice is issued only on 23.4.2010. There are no evidence to support the allegation that the appellant has suppressed facts with intention to evade payment of service - the appellant succeeds on limitation also. Appeal allowed - decided in favor of appellant.
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