BPL LTD. Vs. COMMISSIONER OF SERVICE TAX, BANGALORE

JUDGEMENT

(1.) THIS application seeks waiver and stay in respect of the adjudged dues including an amount of Rs. 48,30,369/ - demanded towards Service tax under the head Manpower Recruitment or Supply Agency Service for the period from June to December, 2005. The appellant viz. M/s. BPL Ltd. has formed a joint - venture with M/s. Sanyo Electric Company Ltd., Japan and this joint - venture is called M/s. Sanyo BPL Pvt. Ltd. Under this arrangement, M/s. BPL Ltd. would ask their employees to resign, who would then join M/s. Sanyo BPL Pvt. Ltd. As some time was taken for the joint - venture to launch its business activities, M/s. BPL Ltd. continued to retain the employees and pay their salaries and wages though the employees were sitting idle. This idle period is from June to December, 2005. In order to compensate the loss arising out of this, the joint -venture paid Rs. 5 crores to M/s. BPL Ltd. (appellant), which was shown as expenditure in the accounts of the joint -venture. The Department framed a case out of this situation. They considered the appellant as a manpower recruitment and supply agent and considered the aforesaid amount of compensation as the consideration for the service of Manpower Recruitment or Supply Agency Service. The impugned demand is on this basis.

(2.) THE learned counsel has narrated the above facts and pleaded prima facie case for the appellant. We have heard the learned Additional Commissioner (AR) also who reiterates the finding of the adjudicating authority. After considering the submissions prima facie we have not found any ingredients of Manpower Recruitment or Supply Agency Service in the aforesaid transactions. Hence, there will be waiver of pre -deposit and stay of recovery in respect of the adjudged dues.