2016 (5) TMI 786

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..... ble services from their foreign based service provider and were paying service charges to them during the period prior to 17-4-2006 and upto 31-10-2006. Based upon an investigation carried out, a show cause notice dated 16-4-2008 was issued to the appellant for demand of Service Tax from 2002-03 till 31-10-2006 under the category of "Management Consultancy Services" and under Reverse charge mechanism. The said show cause notice also sought to demand interest and proposed to impose penalties under various sections. The appellant contested the show cause notice on merits as well as on limitation. The adjudicating authority after following due process of law, dropped the demand of service tax liability for the period prior to 18-4-2006, follow .....

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..... director as salary. She would also draw our attention to a notice issued by the Income Tax Department and decided holding that the amount paid to Mr. Alan Van Niekerk should be considered as salary and it is taxable income in the hands of the appellant. 4. Ld. departmental representative would submit that there is nothing on records to show that Mr. Alan Van Niekerk was paid an amount during the material period as salary. He would submit that the invoices raised by Mr. Alan Van Niekerk indicated that they are paid for the consultancy charges and not as salary. He would submit that whether Mr. Alan Van Niekerk was a director or not, during the material period is not conclusive and the papers submitted by the Ld. Counsel are not produced bef .....

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..... an Van Niekerk as a salary in adjudication proceedings. The adjudicating authority in the case in hand has summarily dismissed the submissions. If an amount paid by the appellant to Shri Alan Van Niekerk is considered as a salary by the Income Tax Department, a branch of Ministry of Finance, Department of Revenue, it cannot be held by the Service Tax Department, another branch of Ministry of Finance, Department of Revenue, as amount paid for consultancy charges and taxable under Finance Act. The same department of Government of India cannot take different stand on the amount paid to the very same person and treat it differently. In our considered view, the amount which is paid to Mr. Alan Van Niekerk, in the circumstances of this case as br .....

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