TMI Blog2012 (6) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... as they were earlier working for the holding company - Persons, who are alleged to have been supplied by the holding company to the appellant can not be said to be the employees of the holding company - No services of "manpower recruitment or supply agency" has been received by the appellant from their holding company. Stay application is allowed. - 58 of 2011 of Customs - ST/726/2011 - Dated:- 5-10-2011 - Archana Wadhwa, Rakesh Kumar, JJ. For Appellant: Shri B L Narsimhan, Adv. For Respondent: Shri Sunil Kumar, DR Per: Rakesh Kumar: The appellants are a subsidiary of M/s. Bain Company, Boston, USA. They provide the taxable services of Management Consultancy and Business Auxiliary Services chargeable to service tax und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01,852/- and the entire amount of disputed amount of cenvat credit of Rs.1,58,353/- had been paid by the appellant, the show cause notice also sough appropriation of these amounts. 1.1 The show cause notice was adjudicated by the Commissioner vide Order-in-Original dated 12.10.2010 by which the service tax demands and cenvat credit demand, as made in the show cause notice, were confirmed along with interest and the amount of Rs.19,01,852/- and Rs.1,58,353/-already paid appropriated towards the demand and besides this, penalties were imposed on the Appellant under Sections 76, 77 and 78 of the Finance Act, 1994. Against this order of the Commissioner (Appeals), this appeal along with stay application has been filed. 2. Heard both the sid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those persons by the appellants, that in view of this, no service of manpower supply has been received and the amount paid by the appellant to their employees in foreign exchange and paid to the holding company towards their P.F. Contribution cannot be said to be the consideration for manpower supply by the holding company, that in view of this, the service tax demand of Rs.1,56,85,563/- is not sustainable, that since an amount of Rs.19,01,852/- towards their service tax liability and an amount of Rs.1,58,353/- towards allegedly wrongly taken cenvat credit has already been paid by them during investigation, the amount already paid is sufficient for compliance of the provisions of Section 35F of the Central Excise Act, 1944 and that in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to recruitment or manpower supply agency means the services provided or to be provided to any person by a manpower recruitment or supply agency, in relation to the recruitment or supply of manpower, temporarily or otherwise in any manner. The allegation in this case is that the appellant have received the services of manpower supply from their holding company in USA and hence in terms of the provisions of Section 66 A of the Finance Act, 1994 read with Rule 2 (1)(d) of the Service Tax Rules, 1994, they would be liable to pay service tax on the gross amount paid by them to the holding company. However, for supply of manpower by a manpower supply agency, the persons supplied to his client have to be the employees of the manpower su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or part time. The value includes recovery of staff costs from the recipient e.g. salary and other contributions. Even if the arrangement does not involve the recipient paying these staff costs to the supplier (because the salary is paid directly to the individual or the contributions are paid to the respective authority) these amounts are still part of the consideration and hence form part of the gross amount." 6. Thus, in case of supply of manpower by an agency, the persons supplied are the employees of the supply agency who receive their salaries/wages and other allowances from such agency and not from the clients, for whose work they have been supplied by the manpower supply agency. In this case, on going through the records, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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