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M/s. Rent Works India Pvt. Ltd. Versus Commissioner of Central Excise, Mumbai-V

2016 (5) TMI 786 - CESTAT MUMBAI

Liability of Service tax - Nature of Amount paid to director - Salary of Management Consultancy Service - from 18-4-2006 till 31-10-2006 - Reverse Charge Mechanism - amount paid to Mr. Alan Van Niekerk (director) was running a proprietor ship concern also - Held that:- 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 b .....

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. Impugned order set aside as unsustainable. - Decided in favour of appellant with consequential relief - Appeal No. ST/145/12-Mum - A/87317/16/STB - Dated:- 15-4-2016 - MR. M.V. RAVINDRAN, MEMBER (JUDICIAL) AND MR. C.J. MATHEW, MEMBER (TECHNICAL) For the Petitioner : Ms. Puloma Dalal, Chartered Accountant For the Respondent : Shri A. B. Kulgod, A.C. (AR) ORDER PER : M.V. RAVINDRAN This appeal is directed against Order-in-Original No. 461/39/V/2011/COMMR/KS/ST dated 27/12/2011. 2. The relevant f .....

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es 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, following the law laid down by the Supreme Court in the case of Indiana National Ship Owners Association, but confirmed th .....

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ed the services to the appellant. It is her submission that the amount paid by the appellant to said Alan Van Niekerk, was a salary for the period 18-4-2006 to 31-10-2006. She would draw our attention to agreement entered by the appellant with the said Alan Van Niekerk and submit that he was the first director of the appellant. She would produce the minutes of the meeting of Board of Directors of the appellant held on 22nd September 2005, which has resulted that Mr. Alan Van Niekerk appointed as .....

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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 Niek .....

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or otherwise. 7. On perusal of the agreement with Mr. Alan Van Niekerk, we find that the said agreement is between appellant and one Mr. Alan Van Niekerk for rendering the services to appellant on the management of market and exclusive services. The said agreement provides for payment of an amount as monthly remuneration of Mr. Alan Van Niekerk and as also additional amount at the discretion of the board as percentage to Alan Van Niekerk. It is seen from the records and more specifically the ba .....

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