TMI Blog2019 (11) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... Expenses and Administrative Expenses . It can be seen from the above definition that Business Support Service covers certain specific activities in its inclusive definition. Only if such specific activities are carried out by a Service provider, it would be classifiable under Business Support Service . From a perusal of the activity undertaken by the Appellant, it is seen that the Appellant had only sent certain number of employees to its subsidiary companies on cost recovery basis. It would not be covered by any activity contemplated in the definition of Business Support Service . Payment of certain amount towards establishment and administrative expenditure for providing certain employees to the subsidiary companies is in the nature of sharing of expenses between two companies and would not fall under any category of taxable service. The logic given by the adjudicating authority in the above mentioned paragraphs justifying the classification of the activity under the Business Support Service is not legally tenable as providing expert man power on cost recovery basis does not fall under any of the inclusive category of Business Support Service . Since the Show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. This amount has been accounted for in their books of accounts under the head of Establishment Expenses and Administrative Expenses received from the subsidiary companies. 2. The Department entertained a view that the reimbursement of the Administrative and other expenses received by the Appellant from the subsidiary companies is covered under the category of Business Support Services as per the provisions of section 65(105)(zzzq) of the Act and therefore, the Appellant should have discharged the Service Tax on the amount received by it from the subsidiary companies under the category of Business Support Service . 3. Accordingly, a show cause notice dated 09 October, 2013 was issued to the Appellant wherein Service Tax of ₹ 1,58,09,015/- was demanded under section 73 (1) read with Section 66 and 68 of the Act. Provisions of Section 75 for charging interest as well as provisions of Section 77(2) for imposition of penalty were also invoked. 4. The matter was adjudicated by the impugned Order dated 21 January, 2015 issued on 20 February, 2015. The learned Commissioner vide the above mentioned Order passed the following ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by, impose penalty of ₹ 10,000/- under Section 77(2) of the Finance Act, 1994 for contravening the provisions of Section 66, 67 and 70 of the Finance Act, 1994 and Rule 6 7 of the Service Tax Rules, 1994. 5. The Appellant is before us against the above mentioned impugned Order-in-Original. The Learned Counsel appearing on behalf of the Appellant contended that it had received reimbursement of the amount of salary paid to the employees who remained posted with the subsidiary companies and it was in a way, reimbursement of the expenses incurred by the Appellant on the employees who would otherwise be working on some specific project with the subsidiary companies; that the activity of deputing employees to the subsidiary companies is not covered under the taxable category of Business Support Service and infact no service has been provided by the Appellant to the subsidiary companies and, therefore, the question of payment of Service Tax on such an activity does not arise. It has further been contended that the Appellant is transferring its employees to its subsidiary companies on temporary basis for a specific purpose and the cost of recovery from its subsidi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit of C AG for the period 2008-2009 and 2009-2010 in the year 2010 and no audit objection was raised on this issue, inspite of the fact that reimbursement of cost of their employees provided to it by the subsidiary companies had always been mentioned in their books of accounts. 9. The learned Counsel has relied upon following decisions in support of the arguments: i) Anand Nishikawa Co. Ltd. Vs. CCE [2005 (09) LCX0013]; ii) Singh Brothers vs CCE [2009 (14) STR 552]; iii) CCE vs. Chemphar Drugs Liniments [1989 (40) ELT 276]. 10. It has further been submitted that since the entire amount was been deposited much before the issuance of Show Cause Notice, the appellant is covered under the provisions of Section 73(3) of the Act and the provisions of Section 73(4A) cannot be invoked and the penalty is also not imposable under Section 77 of Act. 11. Learned Counsel has further placed the definition of Business Support Service as provided under section 65(105) (zzzq) and submitted that it does not cover the activity undertaken by the Appellant and therefore, the Show Cause Notice was issued under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce utilities, lounge, and reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and securities [Section 65(104c)]. 14. It can be seen from the above definition that Business Support Service covers certain specific activities in its inclusive definition. Only if such specific activities are carried out by a Service provider, it would be classifiable under Business Support Service . From a perusal of the activity undertaken by the Appellant, it is seen that the Appellant had only sent certain number of employees to its subsidiary companies on cost recovery basis. It would not be covered by any activity contemplated in the definition of Business Support Service . Payment of certain amount towards establishment and administrative expenditure for providing certain employees to the subsidiary companies is in the nature of sharing of expenses between two companies and would not fall under any category of taxable service. 15. However, the adjudicating authority in the impugned order has held that the activity is taxable under the Business Support Service and the observations are as below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that the definition is exhaustive and the specific items mentioned under the inclusive part is only for ready reference and such items are essentially to be considered as part of the definition. In any case, the said inclusive part does not limit the scope of the definition to the said items. 16. The logic given by the adjudicating authority in the above mentioned paragraphs justifying the classification of the activity under the Business Support Service is not legally tenable as providing expert man power on cost recovery basis does not fall under any of the inclusive category of Business Support Service . The Central Board of Excise and Customs in its clarification issued from F.No. 137/35/2011-ST dated 13 July, 2011 has provided that: Representation has been receive d seeking clarification on applicability of service tax under Manpower Recruitment and Supply service in respect of employees sent on deputation by ONGC to Directorate General of Hydrocarbons (DGHC). 2. The matter has been examined and it is clarified that activity of ONGC for providing its staff on deputation to DGHC for a remuneration in the form of reimburs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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