TMI Blog2015 (11) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... emuneration, service conditions, welfare etc. This clause alone would show that as claimed by the learned AR, according to the agreement the activity is one of Manpower Supply. Appellant does not have a prima facie case. However having regard to the nature of transactions and keeping in mind that the services have been provided only to the group companies and in some cases service has been provided free, we consider that if the appellant deposits an amount of ₹ 5,00,00,000/- (Rupees Five Crores only) which is much less than the demand for the normal period plus interest and less than 10% of the total demand involving service tax, interest and penalty - Partial stay granted. - ST/Stay/22642/2014, ST/Stay/22645/2014 in ST/22293/2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pees Twenty Seven Crores Eighty Seven Lakhs Nineteen Thousand Three Hundred and Twelve only) for the period from 2007-08 to 2011-12 and demand for ₹ 5,14,95,847/- (Rupees Five Crores Fourteen Lakhs Ninety Five Thousand Eight Hundred and Forty Seven only) for 2012-13 have been confirmed with interest. In addition penalties under Section 77 and 78 of Finance Act 1994 have also been imposed. 2. The case of the department briefly is as under: MPCMS (appellant) supplies personnel to MFL and other group companies, but under their terms and conditions, and also under their supervision. For recruitment or supply of manpower, what is relevant is that the staff is not contractually employed by the recipient, but comes under his directi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eas like finance, legal, personnel, technical etc. The establishment of MPCMS also to ensures uniformity in labour compliance and recruitment in MPG. The Labour Department of the Govt. of Kerala has issued Standing Orders for MPCMS which is also applicable to the sister concerns and branch offices of MPG establishments. While MPCMS provided such all encompassing services, to all the entities indicated above, they had a separate agreement with MFL which provided for payment of administrative charges of ₹ 7,50,000 (Rupees Seven Lakhs Fifty Thousand only) or ₹ 15,00,000 (Rupees Fifteen Lakhs only) per month. B. No service has been provided in the nature of MSA Service MPCMS are not in the business of providing M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o mandatorily do so as per the Certified Standing Orders. In contradistinction to the Circular No. B1/6/2005-TRU dated 27.07.2005 and Master Circular No. 96/7/2007-ST dated 23.08.2008, in the present case, the employer-employee relationship exists only between the MPG company and the employee. M/s. Volkswagen India (Pvt.) Ld. V. CCE, Pune-I reported in 2014 (34) S.T.R. 135 Bain Co India Pvt. Ltd. V. Commissioner of Service Tax, Delhi 2012 (25) S.T.R. 588 (Tri.-Del.) D. Furthermore, no consideration has been paid towards the alleged provision of MSA service. No separate amount apart from reimbursement of salaries and employees related expenses has been made to the appellant to merit as a consideration for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The MPG companies are registered service tax paying entities. Therefore, even if tax were to be paid by the appellants, the MPG companies would be entitled to take credit of the same and discharge their service tax liability for the impugned period. The three main MPG companies who are alleged to have received services provided by the appellants are Muthoot Fincorp Ltd., Muthoot Capital Services Limited and M/s. Muthoot Hotels Infrastructure Pvt. Ltd. With respect to these three MPG companies, for the period 2007-2012, the service tax liability amounted to ₹ 16,04,99,739/- (Rupees Sixteen Crores Four Lakhs Ninety Nine Thousand Seven Hundred and Thirty Nine only). Out of this only ₹ 5,54,89,484/-(Rupees Five Cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd specializing in consultancy services and by failing to pay the tax, they have clearly violated the law and therefore invocation of extended period is appropriate. 5. We have considered the submissions made by both the sides. Before we proceed, it would be appropriate to reproduce the definition of Manpower Recruitment or Supply Agency Service. Manpower recruitment or supply agency means any 70[person] engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, 71[to any other person] According to the agreement between MPCMS and MFL in para 3 under terms and conditions, it is provided that MPCMS shall provide necessary personnel to the first party for its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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