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TMI Blog2015 (8) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... e to slump in the steel industry the appellant could not keep the operation continued due to which the creditors filed a petition for winding up of the company. As a compromise scheme, Honourable High Court of Bombay approved the said compromise scheme wherein the factory along with the machinery of the appellant was to be given under leave and licence to one company namely Ferro Alloys Corporation Ltd. (FACOR) initially for a period of 5 years. for the survival of the appellant the said agreement was renewed from time to time. During the scrutiny of the records by authorities it was noticed that appellant did not discharge service tax liability on an amount received for the salary of employees from FACOR. Accordingly, show cause notice was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely on the judgement of this Tribunal in the case of Daurala Organics 2009 (14) STR 620 (Tri. Del.) for the proposition that salaries paid towards the deputation of staff to sister concern is taxable under manpower recruitment and supply agency service. 5. We have considered the submissions made by both sides and perused the records. 6. The issue involved in this case is whether the amounts received by the appellant towards salary and other government dues are liable to service tax or otherwise under the category of manpower recruitment and supply agency service. It is undisputed that the amount received by the appellant is nothing but the reimbursement of salaries and other dues of the employees, who were on the muster role of appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continuing the job and getting paid will be akin to the deputation of personnel to the FACOR. This issue is now squarely covered by the judgement of Honourable High Court of Gujarat in the case of Arvind Mills (supra). The entire judgement is reproduced. 1. Revenue is in appeal against the judgment of the Customs Excise & Service Tax Appellate Tribunal (the Tribunal for short) dated 26.7.2013 raising following questions for our consideration:- (a) Whether in the fact and the circumstances of the case the Hon'ble CESTAT has erred in applying the ratio of a case decided by CESTAT Delhi in case of Pramount communication Ltd. reported in - (2013-TIOL-37-CESTAT-DEL).: 2013 (29) STR 317 without narrating and applying the same to the facts of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and upon completion of the work they were repatriated to the respondent company. On such basis, the Tribunal held that the respondent cannot be said to be Manpower Supply Recruitment Agency and, therefore, not exigible to service tax. 4. Counsel for the Revenue vehemently contended that the definition of Manpower Supply Recruitment Agency is very wide and would include range of activities of supply of manpower either temporarily or permanently. He submitted that sizable manpower was required for the respondent from the group companies for deputation of the staff. He drew our attention to the amendment of such definition to contend that after the amendment, the definition was widened. 5. It is true that in the present form, the definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of manpower temporarily or otherwise to a client, in the present case, the respondent cannot be said to be a commercial concern engaged in providing such specified services to a client. It is true that the definition is wide and would include any such activity where it is carried out either directly or indirectly supplying recruitment or manpower temporarily or otherwise. However, fundamentally recruitment of the agency being a commercial concern engaged in providing any such service to client would have to be satisfied. In the present case, facts are to the contrary. 7. In the result, no question of law arises. Tax Appeal is dismissed. 6.3 We also find that High Court of Allahabad in the case of computer sciences Corporation (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity would not arise.
6.4 It can be seen from the above reproduced ratio; that the amounts received by the appellant in this case as actual salaries cannot be considered as an amount received for rendering of manpower recruitment and supply agency services. As the ratio which has been laid down by the Honourable High Court squarely covers the issue, the decision of the Tribunal in the case of Daurala Organics (supra) will not carry the case of the revenue any further.
7. In view of the foregoing, in the facts and circumstances of this case, relying on authoritative judicial pronouncements we hold that the impugned order is unsustainable and liable to be set aside and we do so.
8. The impugned order is set aside and appeal is allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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