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TMI Blog2020 (4) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice dated 21st October 2010 for the period from 1st April 2008 to 31st March 2009. It is contended that the adjudication order should have upheld the demand of Rs. 21,59,950 and Rs. 60,71,755 as provider of 'manpower recruitment to supply service' and 'support service of business or commerce' for the earlier period in addition to the amount payable for the period from 1st April 2008 to 15th May 2008. The dropping of demand of Rs. 27,15,68,977, arising from having provided both these services between April 2009 and March 2010, in show cause notice dated 21st January 2011 is the controversy in the second appeal. 2. The respondent herein, M/s Cybage Software Pvt Ltd, develops software for its customers, within and outside India, as an approved unit under the Software Technology Park scheme embodied in the Foreign Trade Policy notified under Foreign Trade (Development & Regulation) Act, 1992. The expansion of taxable activity under section 65(105)(k) of Finance Act, 1994 to include manpower supply, even of temporary nature, with effect from 16th June 2005 coupled with liability, under section 67 of Finance Act, 1994, on the gross amount charged from M/s HSBC Software, M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice for the earlier period not dispute the finding of export, or the non-taxability, of the services rendered to overseas customers. 4. A few preliminaries in the proceedings need to be disposed of at the outset to mark the contours of a decision below. Learned Authorised Representative argued strenuously in support of the proposals in the show cause notice with reference to the provisions of Finance Act, 1994 and by placing reliance on various decisions pertaining to 'manpower supply service' that placed emphasis on the contractual underpinnings of transactions as determinant of taxability. Nonetheless, we need not concern ourselves with the whole canvass of the case of tax authorities as the grounds of appeal alone are required to be considered by us in resolution of the claim of Revenue. It is indisputable that Finance Act, 1994, while defining 'manpower recruitment or supply agency', the intended target of taxation, in section 65 (68) has not elaborated upon the expression 'manpower supply'; while 'manpower recruitment' is easily comprehensible, the other is not. M/s Cybage Software Pvt Ltd is a 'export-oriented unit' but has contracted with four customers, enumerated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department also highlights that Pfizer assisted in recruitment and training of the staff, computer hardware and software were provided by Pfizer, the work order is covered by a separate budget which is made on 'per seat cost' including creation of infrastructure facilities. The learned special counsel for the Department also refers to the work order and the attachments and states that the appellants would have to provide service under FSP model in the subsequent period when there will be functional responsibilities on them but not so under the FTE model in the initial period. According to him, the appellants only recruited and provided the staff to Pfizer. 9. However, the learned senior counsel appearing for the appellants has very forcefully argued that even during the initial period under the FTE model, the manpower recruited by the appellants under contract with Pfizer have been retained by the appellants. The manpower so recruited is deployed under the responsibility of the appellants and are paid for by the appellants. He states that the appellants are responsible for the overall project management. He has taken us through the work order and the attachments to demonstrate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Moreover, we find that the nature of services required to be provided by the appellants are in the nature of information technology services as the same relates to data management. Consequently, we hold that the appellants are not liable to pay Service tax in respect of the services provided by them to Pfizer under the impugned contract. Therefore, we also hold that they are eligible for the small scale exemption in respect of the small value of services provided by them to M/s. SAP LABS India Pvt. Ltd. which is below the exemption limit of Rs. 4 lakhs.' settles the issue of taxability of the impugned consideration. 7. It would also appear that the grounds of appeal focus on contractual consideration charged from customers who, in addition, are provided with the impugned service at their premises and attempts to levy the tax premised on the existence of two entities with consideration flowing from one to the other outside the framework of the legislatively intended limits of the taxable entry. In Senairam Doongarmall v. Commissioner of Income Tax, Assam [2002-TIOL-1053-SC-IT-LB], the Hon'ble Supreme Court had occasion to examine the nature of receipts as determinant of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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