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Spirax Marshall P. Ltd., Forbes Marshall P. Ltd. & J.N. Marshall P. Ltd. Versus Commissioner of Central Excise, Pune I

2015 (11) TMI 978 - CESTAT MUMBAI

Demand of service tax - Manpower Recruitment Service or Supply Agency Service - deputation of employees to other company - Held that:- There is no element of profit or finance benefit. The subsidiary companies cannot be said to be their clients. Deputation of the employees was only for and in the interest of the company. There was no relation of agency and client. It was pointed out that the employee deputed did not exclusively work under the direction of supervision or control of subsidiary com .....

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cal) ORDER Per: M.V. Ravindran: All these three appeals are directed against Order-in-Original No. PI/Commr/ST/23&24/ 2011 dated 30.08.2011 and Order-in-Appeal No. PI/RKS/121-122/2012 dated 23.05.2012. 2. Heard both sides and perused the record. 3. The issue involved in this case being the same and in respect of the same group companies we dispose of all the appeals by a common order. 4. The relevant facts that arise for consideration are during the period June 2005 to March 2010 all the thr .....

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he service tax liability was confirmed along with interest and penalties. The confirmation of the service tax liability is under the category of Manpower Recruitment Service or Supply Agency Service. 5. The main contention of the ld. CA is that the issue is now squarely covered by the judgment of the Hon'ble High Court of Gujarat in Arvind Mills Ltd. 2014 (35) STR 496 (Guj) and that in identical issue in one of their group companies matter in the case of Krohne Marshall Pvt. Ltd., this Tribu .....

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have considered the submissions made at length by both the sides and perused the records. The undisputed fact is that the appellant is one of the group companies of Forbes Marshall. It is also undisputed that there is an arrangement of deputing the employees of the appellant to various group companies. The various group companies, where the employees are deputed, make salary payment to the appellant on actual basis is also undisputed. Based upon such factual matrix, we find that the claim of th .....

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w: 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 Aramount communication Ltd. reported in 2013-TIOL-37-CESTAT-DEL.: 2013 (29) STR 317 without narrating and applying the same .....

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s a Manpower Supply Recruitment Agency. Definition of the said term applicable at the relevant time reads as under:- "Manpower recruitment or supply agency means any commercial concern engaged in providing any service directly or indirectly, in any manner for recruitment or supply of manpower, temporary or otherwise to a client". 3. Brief facts are that respondent had a composite textile mill and was engaged in manufacturing of fabrics and ready-made garments. In order to reduce its co .....

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rvision of the subsidiary company 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 .....

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ly held by the Tribunal. To recall, the respondent in order to reduce his cost of manufacturing, deputed some of its staff to its subsidiaries or group companies for stipulated work or limited period. All throughout the control and supervision remained with the respondent. As pointed out by the respondent, company is not in the business of providing recruitment or supply of manpower. Actual cost incurred by the company in terms of salary, remuneration and perquisites is only reimbursed by the gr .....

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