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2020 (3) TMI 315

..... s identified and allocated by M/s. WTI to carry out such functions and project related activities as allocated by M/s. WTI from time to time - whether the activity would fall within the definition of “Manpower Recruitment and Supply Agency Service”? - HELD THAT:- The nature of the contract is for supply of manpower. The consideration is paid on the basis of man-hours. It can also be seen that the work is executed as per the guidance of M/s. WTI. Thus, for carrying out the development, maintenance, etc., of software, the persons so deployed by the appellant to M/s. WTI are under the control of M/s. WTI and they work under the guidance and supervision of M/s. WTI. Learned Counsel for the appellant has made much effort to contend that the services are ‘Information Technology Software Services’ and not ‘Manpower Recruitment and Supply Agency Services’. However, from the agreement entered by the appellant with M/s. WTI it is very much clear that activity falls within the four corners of Manpower Recruitment and Supply Agency Service. The demand is legal and proper - appeal dismissed - decided against appellant. - Service Tax Appeal No. 41151 of 2013 - .....

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..... een continuously paying Service Tax under this category. The considerations received from M/s. WTI during the disputed period is not for any Manpower Recruitment and Supply Agency Service, but is in fact for providing Information Technology Software Service. 3.3 He further submitted that Section 65 (68) of the Finance Act, 1994, which defines Manpower Recruitment and Supply Agency Service , was amended with effect from 16.05.2008 by substituting the words to a client with the words to any person . The Department has not established that M/s. WTI is the client of the appellant. The transaction was only on principal to principal basis and the authorities below have erred in holding that M/s. WTI is the client of the appellant. That for such reasons, the activity of the appellant will not fall under Manpower Recruitment and Supply Agency Services. 3.4 It is also argued by the Learned Counsel that the Show Cause Notice issued is not maintainable as the same did not allege that the activities of the appellant involved supply of manpower which involves work under the control of M/s. WTI. The said category of taxable service would be applicable only if the employees worked under the contr .....

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..... supply agency means any [person] engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, [to any other person];] 7.1 The following clauses in the agreement entered between the appellant (BA) and M/s. WTI would bring out the nature of the transaction : WHEREAS, WTI, among other business, is in the business of developing, constructing, licensing, updating, enhancing, implementing, maintaining, supporting and marketing computer application software system; AND WHEREAS, BA has represented to WTI that it has a pool of highly skilled and specialized Employees experienced in the development, enhancement, implementation and maintenance of Software Projects and proposed to WTI that it is willing to provide on subcontract basis technical assistance in respect of computer application software system development, implementation and maintenance work undertaken by WTI from its various clients by deputing its Employees to WTI/WTI Client locations to work on the project along with WTI Project team. . . . 3. SCOPE OF BA ACTIVITIES: As WTI Business Associate, BA shall engage in the following activities with due diligenc .....

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..... ice submitted by BA d) BA Employees shall not be entitled to any overtime charges or to work on any holidays as a compensation for the leave taken or absence from work on any other working days. BA employees shall also not be paid for working on any week ends or holidays declared by WTI or its Clients. . . . 6.4. In case, on verification of an invoice, it is found that the BA personnel have not worked for the number of hours invoiced, WTI shall be at liberty to adjust the invoice value proportionately. 6.5. BA shall provide to WTI all, documents, data and information about the salary and other benefits provided by it to its Employees as and when called upon to do so by WTI. However in case of BA Employees sent on Overseas deputation, BA shall provide this said information in the prescribed form every month. . . 6.7. WTI shall have the right to withhold payment under the following circumstances, (a) If, upon a request by WTI, BA has not replaced any Employee(s) within a period of fifteen (15) days from such request having been made, which Employee(s) is (are), in the sole discretion of WTI, incapable of performing the functions assigned to him/her/them by the WTI Project Leader and/ .....

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..... ng to deliverables and quality of work in the contracts but these by themselves do not indicate that the appellants are providing information technology software services to TCS and Infosys. Any person or organization obtaining skilled personnel has to ensure that such men deliver work of standard quality. No one would employ a person who is not skilled enough and no one would pay for shoddy work even if done by a skilled man. The relevant clauses in the contract in this regard on which much emphasis was sought to be put by the learned senior counsel for the appellants have to be viewed in the light that TCS and Infosys are merely seeking to obtain personnel from the appellants with necessary skill who will work diligently on the projects undertaken by TCS and Infosys. 14. The learned special counsel for the Department has rightly pointed out a significant provision in the contracts which require the appellants to replace personnel who leave the job by suitably trained personnel as substitutes. Such provisions in the contract go to show that the number of skilled persons supplied is important from the point of view of TCS and Infosys. If the appellants were actually to deliver the .....

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