9911796707
Advanced Search 
TMI Blog2021 (2) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... 8(1) of Finance Act, 1994 (Not quantified). 2. Briefly the facts of the present case are that the appellants are engaged in providing taxable services falling under the category of "Information Technology Software Service" classifiable under Section 65B(44) of the Act. During the course of audit on the records of the appellants, it was noticed that the appellants during the period from April, 2014 to September, 2015 had incurred foreign currency expenditure by way of reimbursement of expenses incurred in regard to the remuneration paid to manpower deployed from their parent company M/s Lowe's Companies Inc, (NC) USA, Mr. Gary Whitman and Mr. Ram Narayan were deployed for assistance in the Indian operations at the appellant's premises and the Lowe's Companies raised debit notes for the reimbursement of the said expenses met by them from their Indian counterpart, the appellant. On the allegations that the appellants had evaded payment of service tax under the category of "Manpower Recruitment or Supply Agency Service", the Department issued a SCN dated 10.11.2016 proposing to demand service tax amounting to Rs. 47,23,600/- for the disputed period along with interest and penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work under the directions of the recipient of the services i.e. Appellants and that the Appellants have failed to show that the expats have ceased to be the employees of their Parent Company. c. The expats are not under the effective and absolute control of the Appellants as the issues regarding the appointment and dismissal, payment of the salaries etc. are within the control of the Parent Company. d. The Appellants failed to show that reimbursement was on actuals. Aggrieved by the said order, the appellant has filed the present appeal. 3. Heard both the parties and perused the records of the case. 4. Learned Counsel for the appellants submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law and the precedent decisions rendered by this Tribunal, High Courts and the Hon'ble Supreme Court. Learned Counsel referred to various clauses of the agreement between the appellants and its foreign entity vide which the foreign entity deputes expatriates to the appellant in terms of the Secondment Agreement dated 01.07.2014 which int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded employee and its terms inter alia stipulates as under: a) The assignee shall not represent the Parent Company for the duration of the assignment; during the assignment, the Parent Company shall not be responsible for any acts or omissions committed by the assignee; b) The assignee shall act under the direction and supervision of the Appellant Company for rending their services to the latter; c) At the completion of the assignment, the assignee can return to the Parent Company. However, the letter of assignment does not constitute an employment contract or a guarantee of employment with the Parent Company; d) For convenience, the assignee shall be paid their base salary and other earnings in US Dollars to the extent allowable under the applicable laws of India on behalf of the Appellant Company. 4.2. He also referred to the Letter of Employment issued by the appellant to the seconded employee which provides the terms of employment which summarised as under: a) The term of employment contract is for a period of one year from the effective date and any extension there to will be at the discretion of the Appellants; b) For admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellants have deducted tax in terms of Section 192 of the Income Tax Act, 1961 and deposited the same with the Government as evidenced by the Form 16 issued to the seconded employees, with details of the salary, allowances, deductions and tax deductions. He further submitted that this issue is no more res integra and has been settled by various decisions of this Tribunal, the High Courts and the Hon'ble Supreme Court and relied upon the following decisions: * Volkswagen India Pvt. Ltd. Vs CCE, Pune-I, 2014 (34) STR 135 (Tri. Mumbai). * Paramount Communication Ltd. Vs CCE, Jaipur, 2013-TIOL-37CESTAT-DEL. * Nissin Brake India Pvt. Ltd. Vs CCE, 2019 (24) GSTL 563 (Tri. Del.). * Computer Sciences Corporation India Pvt. Ltd. Vs Commissioner of Service Tax, Noida, 2014 (35) STR 94 (Tri. Del.), 2015(37) STR 62 (All.). * Honeywell Technology Solutions Lab Pvt. Ltd. Vs CST, Bangalore, 2020-TIOL-1277-CESTAT-BANG. * Northern Operating System Pvt. Ltd. Vs CCE, 2020-VIL-562CESTAT-BLR-ST. * Target Corporation India Pvt. Ltd. Vs CCE, Bangalore, Final Order No.20008/2021 dated 19.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of article 366 of the Constitution; or (iii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force. 6.3. Further, after examining the various definitions cited supra, we find that in order to classify any service under the manpower recruitment or supply agency service the following conditions need to be satisfied: i. The agency must be any person ii. It must be engaged in providing a specified service iii. The specified service is recruitment or supply of manpower iv. The service can be provided "temporarily or otherwise' v. The service may be provided directly or indirectly vi. The service may be provided in any manner vii. The service must be provided to any other person 6.4. Further, we find that identical issue was decided by this Tribunal in the case of Target Corporation India Ltd. cited supra relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may refer to few of the decisions, in the case of Honeywell Technology Solutions Pvt. Ltd. Vs CST, Bangalore, 2020-TIOL-1277-CESTAT-BANG wherein recently this Tribunal based on identical set of facts set aside the demand in as much as there was a distinct employee-employer relationship between the seconded employee and the assessee. We also hold that method of disbursement of salary cannot determine the nature of the transaction and this issue was considered in the case of M/s. Volkswagen India Pvt. Ltd. v. CCE, Pune-I reported in 2014 (34) S.T.R. 135 (Tri. - Mumbai) which has been upheld by the Hon'ble Apex Court in the case of Commissioner Vs Volkswagen India (Pvt.) Ltd. - 2016 (42) S.T.R. J145 (S.C.). We also find that in the case of Computer Sciences Corporation India Pvt. Ltd. v. Commissioner of Service Tax, Noida reported in 2014-TIOL-434CESTAT DEL as affirmed by Commissioner of Central Excise v. M/s Computer Science Corporation India Pvt. Ltd. 2015 (37) S.T.R. 62 (All.) wherein the facts of the case were similar to the present case. The Hon'ble High Court of Allahabad has dealt with the said issue and has held as under: "8. In the present case, the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
