Under the secondment contract, the Customs, Excise, and Service Taxes Appellate Tribunal (CESTAT) ruled that there will be no tax applied to the employees.
The petitioner is the owner or the northern operating systems Pvt ltd and is registered under the council for releasing the service tax beside the categories of “Manpower Recruitment Agency Service”, “Business Auxiliary Service”, “Commercial Training and Coaching Service”, “TTSS”, “Telecommunication and Legal Consultancy Service” etc.
The audit results of the records are undergone through the department of the council, against the petitioner the proceedings were conducted for the nonpayment of the service tax with respect to the contracts inserted through the petitioner with its group companies sited in USA, UK, Dublin (Ireland), Singapore, etc. and give a normal back-office and operational support to these organizations.
To the 2nd employees, the petitioner has given Form 16. Income tax returns 
The revenue officer urges that the revenue is that the petitioner has been unable to release the service tax below the category of “manpower recruitment or supply agency service” in concern to the particular employees who were seconded to the petitioner through the foreign group companies.
under the proviso to Section 73(1) read with Section 66A of the Finance Act, 1994 the council has given two show-cause notices urging to demand service tax below the category of “manpower recruitment or supply agency service”.
Read Also: Modified Scheme of Tax Collection for Salaried Employees: CBDT
The commissioner has passed the challenged order in a real way in which he has to ignore the majority of the submissions proceeded through the petitioner and approved the recommendations in the notice excluding the requirement for the duration from April 2006 to September 2006 and admitting the truth that portion of the need is raised with the rate of 12.3% rather than 10.30%.
The two judges include S.S.Garg and P. Anjani Kumar which reveals that the individuals seconded to the petitioner working for the capacity of employees and the payment of salaries etc were furnished to these employees through the group companies for the disbursement plan and thus employee and employer relationship do survive and these are known as “manpower recruitment or supply agency” and the complete arrangement amid the petitioner and its organizations will not lies beneath the taxable service of manpower recruitment or supply agency service as explained below the Finance Act, 1994.
