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2024 (3) TMI 10 - CESTAT AHMEDABADLevy of service tax - remuneration paid by the Appellant to its directors - reverse charge mechanism - HELD THAT:- In the light of the records submitted by the Appellants, in terms of Board Resolution and Income tax returns submitted under Form – 16, it is opined that the Directors have been appointed as employees of the Appellant’s Company - the matter is no longer res- integra as the same has already been deliberated upon and decided by this Tribunal. The issue has been squarely covered by this Tribunal under similar facts and circumstances. In the case of M/S BENGAL BEVERAGES PVT. LTD. VERSUS CGST & EXCISE, HOWRAH [2020 (11) TMI 622 - CESTAT KOLKATA], it was held that the whole-time Director is essentially an employee of the Company and accordingly, whatever remuneration is being paid in conformity with the provisions of the Companies Act, is pursuant to employer-employee relationship and the mere fact that the whole-time Director is compensated by way of variable pay will not in any manner alter or dilute the position of employer-employee status between the company assessee and the whole-time Director. We are thoroughly convinced that when the very provisions of the Companies Act make whole-time director (as also in capacity of key managerial personnel) responsible for any default/offences, it leads to the conclusion that those directors are employees of the assessee company. The directors of the Appellant are employees of the Appellant Company and following the judicial discipline on the similar issue, it is held that the impugned order is not sustainable, hence the same is set aside as it is without any merit - appeal allowed.
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