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TMI Blog2025 (2) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... deals with fixed price project and time and material project, observed that in the case of time and material project, it was a case of manpower supply and hence, they were liable to pay Service Tax under that category. The impugned order also invoked suppression on the ground that the appellant knowingly mis-declared the service as 'Consulting Engineer Service' instead of classifying the same under 'Manpower Recruitment and Supply Agency service'. Accordingly, confirmed the Service Tax demand of Rs.69,31,428/- for the period June 2005 to March 2007 along with interest under Section 75 of the Finance Act, 1994. And also imposed penalties under Section 76, 77 and 78 of the Finance Act, 1994. 3. The learned counsel for the appellant submitted that the appellant is a 100% EOU / STPI unit and is engaged in the business of information technology services. They had registered themselves under the category Consulting Engineering Services and as per exemption Notification No.4/1999-ST dated 28.02.1999 which was in force till 10.09.2004, taxable service by a consulting engineer in relation to computer software was exempted from payment of service tax. Thereafter, 'Consulting Engineer' defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. 4.1 With regard to suppression, it is stated that the appellant was aware of the fact that the services rendered by them was manpower supply service but intentionally misrepresented the fact that it was consulting engineer service hence, the extended period of limitation is invokable. 5. Heard both sides. As far as the merits of the case is concerned, it is no more res integra in as much as the agreements with M/s. Philips Electronics India Ltd. in the present case was similar to the agreement entered by M/s. Aztecsoft Ltd. with M/s. Philips Electronics India Ltd. and the issues are also identical with regard to Fixed Price Projects and Time And Material Projects rendered by the appellant and this Tribunal on examination of these agreements had clearly held that the services rendered by the appellant is nothing but a 'Manpower Recruitment and Supply Agency service'. The observations of the Tribunal are as follows: "6.2. Let's examine the projects. The Master Services Agreement entered into between the appellant and M/s. Philips Electronics India Limited on 7th December 2005 states that the appellant had experience in developing software related to embedded software, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned that each SOW shall contain either on a fixed fee or time and material terms. In case of 'Fixed Price Projects', the payment is based on the deliverables associated with the relevant milestones as specified in the SOW. However, in the case of 'Time and Material Projects', the payments are monthly for each hour of work actually spent performing the services during such month. As seen from the invoices placed on record, it is seen that in the case of 'Time and Materials Project', the name of the personnel and the number of hours spent by them is specified and against each personnel, the monthly payments are also specified. For instance, in the purchase order No.2006868 dated 22.02.2006, the engineering service charges of Shri Subbarayadu. G is shown as Rs.81,000/- for January 2006 for 20 days and Rs.90,000/- each for February 2006 to April 2006 and in total Rs.3,51,000/- is paid to Shri Subbarayudu. G. Thus, from the above clauses of the Agreement, it is categorically clear that the 'Fixed Price Project' is for software services rendered by the appellant to their client while 'Time Material Project' deals with providing of personnel. Therefore, the claim of the Revenue that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as emerged clearly is that the appellants have deputed skilled personnel including computer engineers to work under the supervision and control of TCS and Infosys personnel in-charge of projects undertaken by TCS and Infosys. The appellants are getting paid in terms of the man hours for the persons deputed to work under the control and supervision of TCS and Infosys." In the instance case as already discussed above, the skilled personnel have been supplied by the appellant to their clients and the payments are also based on the man hours for the persons deputed by the appellant. In view of the above, we do not find any reason to disagree with the decision and therefore, the demand of service tax as manpower supply service is upheld. 6. With regard to suppression, we find that appellants have been filing regularly ST-3 returns which is placed on record by the appellant, it is seen that appellant had clearly declared 'amount billed for exempted services other than export' which now the Revenue has confirmed as 'Manpower Recruitment and Supply Agency Service'. The learned counsel has also referred to the definition of 'Consulting Engineer' in Board Circular No.4/1999, which reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in invoking first proviso to sub-section (1) of Section 11A. Prima facie, it is apparent that there was no justifiable reason for invoking larger period of limitation. There is no suppression on the part of the appellant-firm in mentioning the goods manufactured by it. The appellant claimed it on the ground that the goods manufactured by it were other articles of plastic. For the insulating fittings manufactured by it, the tariff entry was correctly stated. The concerned officers of the Department, as noted above, after verification approved the said classification list. This Court has repeatedly held that for invoking extended period of limitation under the said provision duty should not have been paid, short-levied or short-paid by suppression of fact or in contravention of any provision or rules but there should be wilful suppression. [Re : M/s. Easland Combines, Coimbatore v. The Collector of Central Excise, Coimbatore, C.A. No. 2693 of 2000 etc. decided on 13-1-2003]. By merely claiming it under heading 3926.90 it cannot be said that there was any wilful misstatement or suppression of fact. Hence, there was no justifiable ground for the Tribunal for invoking the first provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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