TMI Blog2020 (3) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and Supply Agency Service cannot sustain. Demand of service tax - Computer Network Service (on-line information and database access and/or retrieval service) - HELD THAT:- It is seen from the invoice that the appellant has paid the amount to M/s. NSK Ltd., Japan. In fact, the services have been provided by M/s. NSK Network and Systems Co. Ltd., Japan to M/s. NSK Ltd., Japan. M/s. NSK Ltd., Japan has collected the cost share that was to be paid by the appellant and then paid it to the service provider viz., M/s. NSK Network and Systems Co. Ltd., Japan. The amount has been paid by appellant vide invoice raised on M/s. NSK Ltd., Japan and not to M/s. NSK Network and Systems Co. Ltd. who have provided the service of software support, liaison support, etc., for networking. Since there is no evidence of a service provider-service recipient relationship with M/s. NSK Ltd., Japan to whom appellant made payment with regard to this service, the demand made under this category cannot sustain. Consulting Engineer Service - Appellants have paid Service Tax under the said category, but however, did not include the amount paid in the nature of travel expenses, etc. - HELD THAT:- There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants are liable to pay Service Tax under Manpower Recruitment and Supply Agency Service , Computer Network Service (on-line information and database access and/or retrieval services) and Consulting Engineer Service . Show Cause Notice dated 19.04.2010 was issued proposing to demand Service Tax under the above categories along with interest and also for imposing penalties. After due process of law, the Original Authority vide order impugned herein confirmed the demand, interest and imposed penalties. Aggrieved by such order, the appellant is now before the Tribunal. 3.1 Learned Counsel Shri. V.S. Manoj appeared and argued on behalf of the appellant. It is submitted by him that the appellant is a Joint Venture Company between M/s. NSK, Japan and M/s. ABC Bearings Ltd., India. In the said Joint Venture, the Japanese Company has 75% share and the Indian Company is holding the balance. The primary purpose of the Joint Venture Company is to engage in manufacture and sale of automotive bearings and components to the Japanese transplant customers in India and to Indian automotive industries. 3.2.1 He explained the facts relating to the demand made under Manpower Recruitment and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E. [2014 (34) S.T.R. 135 (Tri. Mum.)]; (ii) Commissioner v. Volkswagen India (P) Ltd. [2016 (42) S.T.R. J145]; (iii) C.C.E. v. Computer Sciences Corpn. India P. Ltd. [2015 (37) S.T.R. 62 (All.)]; (iv) Bain Co. India Pvt. Ltd. v. C.S.T., Delhi [2014 (35) S.T.R. 553 (Tri. Del.)] 3.3.1 With regard to the demand under the category of Computer Network Service (on-line information and database access and/or retrieval service), the Learned Counsel for the appellant submitted that M/s. NSK Ltd., Japan had engaged M/s. NSK Network and Systems Co. Ltd., Japan for providing software support, liaison support for networking of all the group companies. The charges towards the same is paid by M/s. NSK Ltd., Japan and later on reimbursed by the appellant towards their share since the networking is common and belongs to all. In such situation, there is no service provider-service recipient relationship between the appellant and M/s. NSK Ltd., Japan. It is merely a case of recovery of cost by M/s. NSK Ltd., Japan of the appellant s apportioned cost share. M/s. NSK Ltd., Japan has not provided any services to the appellant and the amount paid to M/s. NSK Ltd., Japan in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... litigations were pending on such issues before various fora. There is no element of wilful suppression, mis-statement, fraud or collusion with intent to evade payment of Service Tax, for which reason the extended period of limitation cannot be invoked. He also prayed to set aside the penalties. 4.1 Learned Authorized Representative (A.R.) Shri. S. Balakumar appeared and argued the matter on behalf of the Revenue. He supported the findings in the impugned order. 4.2.1 It is submitted by him that from the terms and conditions of the Master Secondment Agreement entered into between the appellant and M/s. NSK Ltd., Japan and M/s. ABC Bearings Ltd., India on 16.10.2007 it can be seen that the employees concerned were regular employees of the appellant and remained so during the secondment term also. The pay and perks of the employees concerned are fixed by the foreign company (M/s. NSK Ltd., Japan). So also, the right to dismiss the employees concerned or reduce or withhold the salary and perks remains with the foreign company. The employees concerned remain in the payroll of the foreign company. The employees concerned perform their duties on behalf of the foreign company and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought out on record as well as after perusal of the Master Secondment Agreement, it is seen that M/s. NSK Ltd., Japan deputed staff to the appellants generally for a period of two or three years. The said staff were under the payroll of the relevant foreign company and the appellant is responsible for payment of salary, bonus, etc., to the employees. After the work period, they would return to the parent company. The salary package for the above deputed staff is in the designated foreign currency; part of the salary was disbursed to the staff in India and the balance was disbursed to their account in the home country. TDS for the above payment in India was deducted by the appellants. As per the agreement, the employees so deputed shall be the employee of the foreign company and he shall report to the Joint Venture Company (the appellant herein). During the secondment, employees shall work exclusively for the Joint Venture Company and they are not to work for the foreign company. 6.1.2 As per Section 5 of the Master Secondment Agreement, the employee shall be an employee of its Home Company (M/s. NSK Ltd., Japan). During the deputation, employee will not be subject to foreign co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s group companies certain social security and other benefits that were payable to the accounts of the expatriate employees under the laws of the foreign jurisdiction. 5. The Commissioner in the order of adjudication confirmed the demand of tax, interest and penalties on the basis that the assessee had provided a taxable service within the meaning of Section 65(105)(k) of the Act of 1994. Under Section 65(105)(k) a taxable service is a service provided or to be provided to any person by a manpower recruitment or supply agency in relation to the recruitment or supply of manpower, temporarily or otherwise, in any manner . The Tribunal while allowing the appeal, filed by the assessee, relied upon a decision of its coordinate Bench in Volkswagen India (Pvt.) Ltd. v. Commissioner of C. Ex., Pune-1 - 2014 (34) S.T.R. 135. . . . 7. In order to be a taxable service within the meaning of Section 65(105)(k), the service must meet the following requirements : (i) there has to be a service provided or to be provided to any person; (ii) the service has to be provided by a manpower recruitment or supply agency; and (iii) the service must be provided in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). In view of this, the service tax demand on this basis is not sustainable. 6.5 From the discussions made above as well as following the ratio in the above two cases, we are of the considered opinion that the demand under Manpower Recruitment and Supply Agency Service cannot sustain and requires to be set aside, which we hereby do. 7.1 With regard to the second issue, which is the demand of Service Tax on Computer Network Service (on-line information and database access and/or retrieval service), it is seen from the invoice that the appellant has paid the amount to M/s. NSK Ltd., Japan. In fact, the services have been provided by M/s. NSK Network and Systems Co. Ltd., Japan to M/s. NSK Ltd., Japan. M/s. NSK Ltd., Japan has collected the cost share that was to be paid by the appellant and then paid it to the service provider viz., M/s. NSK Network and Systems Co. Ltd., Japan. The amount has been paid by appellant vide invoice raised on M/s. NSK Ltd., Japan and not to M/s. NSK Network and Systems Co. Ltd. who have provided the service of software support, liaison support, etc., for networking. 7.2 At the most, it can only be considered as reimbursement of charges and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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