BRITANNIA INDUSTRIES LTD. Vs. COMMR. OF SERVICE TAX

JUDGEMENT

(1.) DEMAND for Service Tax of Rs. 71,82,570/ - with interest has been confirmed taking a view that the appellants had provided 'Manpower Recruitment or Supply Agency Service' during the period from April 2006 to March 2010. Besides demanding tax with interest, penalties under various Sections of Finance Act, 1994 have been imposed. Show cause notice was issued on 14 -10 -2011. The appellants have engaged in the manufacture and marketing of Biscuits. The appellants have outsourced the manufacturing activity of biscuits to various job -workers and the issue before us is in relation to such outsource arrangement entered into by the appellants with J.B. Mangaram Foods Pvt. Ltd. (JBM) vide agreement, dated 9 -5 -2000 for manufacture of biscuits for the appellants. To ensure that quality of biscuits is as per the specification and standards of the appellants, the appellants deputed certain personnel to JBM premises to carry out checks on the quality of biscuits manufactured by JBM on their behalf. Salaries of the said personnel were recovered from job -workers. Treating the salary recovered from job -workers as consideration for 'manpower supply service', demand for Service Tax with interest has been confirmed and penalties have been imposed.

(2.) THE following submissions were made by learned counsel on behalf of the appellants: