TMI Blog2023 (11) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... 73 of the Finance Act, 1994 - Suppression of facts or not. Requirement of classification of service under proper category of service - HELD THAT:- Even before the issue of show cause notice, during correspondence with the appellant, the department had pointed out the various differences in payments made in foreign currency in the books of account of the appellant vis-a-vis the ST-3 returns and alleged that that the Appellant was procuring various services from foreign vendors and was making payments in foreign currencies towards professional fee/engineering services, license fee/ subscriptions, corporate cost allocations, repairs and maintenance, consultancy fees, bank charges etc. for use in business and had short paid / not paid service tax on the same under reverse charge. Therefore, the appellant was put to a sufficient notice of the alleged irregularities in filing the ST-3 returns and if the appellant did not agree to the allegations, it was incumbent upon him to specifically contradict those allegations by reconciling the figures in books of account and the ST-3 returns - there was no lack of clarity on the part of the department in determining the nature and impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployees as detailed above, there is no doubt that the effective control over the employees deputed in India always remains with Linde AG, Germany and the appellant has no role in their appointment. Terms of service in India, remuneration of the employees, social security benefits, duration of service in India are all decided by Linde AG, Germany and as per agreement German Law is proper law for the agreement . The invoices detailed in the adjudication order clearly state that the services provided by the seconded employees to the appellant are of consulting engineer - the service agreements of the seconded employees do not show that those are the employees of the appellant and for all effective purpose, they remain employee of their Home Company and merely providing services to the Company at the behest of the Home Company i.e Linde AG, Germany. The ratio of the Apex Court judgement in the case of C.C.,C.E. S.T. BANGALORE (ADJUDICATION) ETC. VERSUS M/S NORTHERN OPERATING SYSTEMS PVT LTD. [ 2022 (5) TMI 967 - SUPREME COURT ] is squarely applicable to the facts of the case. The Company is effectively providing taxable service of Consulting Engineer services defined un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove that the amount was not taxable. Having failed to prove that the amount received in foreign currency was not subject to tax liability, the demand of service tax in this regard is upheld. Payment of tax to government authorities - HELD THAT:- The adjudicating authority his merely proceeded on assumption and presumption to the taxability and nature of taxes paid by the appellant to the governments abroad without ascertaining the actual contents of the assessment orders. Merely for the reason that the assessments orders were in German, the adjudicating authority should not have proceeded on presumptions. He should have asked the appellant to provide English Translation of the assessment orders or should have taken assistance of the private translators to arrive at the true nature of the taxes paid by them - matter is remanded back on this issue also to decide the matter afresh. Purchase of Protective Clothing - HELD THAT:- Since the services provided by the seconded employees have already been held to be taxable under the service tax provisions as 'Consulting engineer services', the protective clothing will form part of the gross amount to be taxed in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for a particular amount, onus lies upon him to prove that the amount was not taxable. Having failed to prove that the amount paid in foreign currency was not subject to tax liability, the demand of service tax upheld in this regard. Time limitation u/s 73 of the Finance Act, 1994 - Suppression of facts or not - HELD THAT:- There are several layers of suppression and mis-representation of facts with a motive to avoid service tax. These layers of suppression cannot be detected by mere mundane audit of financial records. Thus, the extended time period for demanding service tax has rightly been invoked in this case. Appeal disposed off. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C.L. MAHAR, MEMBER (TECHNICAL) Shri Venkateshwaran and Ms. Nikita Jain, Chartered Accountants for the Appellant Shri Tara Prakash, Deputy Commissioner (AR) for the Respondent ORDER The brief facts of the matter are that M/s. Linde Engineering India Private Limited ('the Appellant') is registered with the jurisdictional service tax department, having a centralized service tax registration. The Appellant is engaged in the business of providing taxable output ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax amounting to Rs. 4,94,88,067/- along with interest under Section 75 and penalty under Section 78(1) and 77(2) of the Act vide impugned order dated 29.01.2021. The period of demand is 2011-12 to 2014-15. The appellant is in appeal before us against the impugned order. 3. In the appeal memorandum the appellant has submitted that the following services are in dispute in the present proceedings against which the demand has been confirmed in the impugned order:- S. No. Nature of expense Grounds for confirming the demand I Professional Fees/ Engineering Cost For levy of tax on services, there is no such condition of consumption or performance of the services in India. The only condition is that the service should be used in relation to business or commerce of the recipient of such service. The specified conditions for discharging services tax on receipt of services from outside India have been fulfilled in this case. II Corporate cost allocation (Employee secondment cost) On perusing through the Assignment Agreements, Commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged. Reason for rejection of the plea with respect to label dispenser is that the purpose of such goods and the purchase documents of the so called goods was not provided. Reason for rejection of plea with respect to demurrage charges and bank charges is that the Appellant has not submitted documentary evidence. Reason for rejection with respect to Purchase of Books/ Magazines is that the same has been paid for online subscription of magazine. Online subscription of Magazine is not specified in negative list. VII Consultancy fee The expenses are incurred towards the taxable services of Engineering Consulting Services. All payments made towards the Engineering Consulting Service are liable to service tax under RCM. The first issue raised by the appellants is that it is essential that the service is classified under proper category of service. Without such classification, charge of service tax does not apply. In the present case, the Adjudicating authority has not appropriately determined the individual nature of service against which the impugned differential amount shall be chargeable to servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Repairs and maintenance 814590 8707134 21082436 16592810 47196970 Consultancy fees 8622749 2814602 19188734 1581323 32207408 Bank Charges 25724675 25724675 Other 1771398 9104727 15267067 451885360 478028552 Gross as per Balance Sheets 457573982 232307627 510063525 884546103 2084491237 Expenses as per ST-3 2011-12 2012-13 2013-14 2014-15 Total Consulting 188102420 27846426 242042192 124136267 582127305 Online data retrievable 94 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oup companies outside India and availed various services outside India in relation to provision of such export of services. Such services received by them are either in the nature of supervision services in relation to installation / repair of goods or in relation to immovable property. The services under consideration have been availed by them in order to execute its work / provide services to its client on their site located outside India. The professional fees / engineering services on which service tax is not paid are those services which are received by them outside India and are consumed outside India in connection with providing the export services. The Appellant submits that for receiving the aforementioned service, the Appellant was issued the invoice bearing no. B012209077 dated 12 December 2012 for EUR 13,42,000/- (INR 9,17,72,871) by M/s. Linde AG, Germany in the month of December 2012 against which payment was made by the Appellant on 26 December 2012.the Appellant submits that both the invoice date as well as the payment pertains to the period after 1st July 2012, therefore, the place of supply of the said services shall be determined as per PoPSR. Further, the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided in this regard by experts and estate agents, provision of hotel accommodation by a hotel, inn, guest house, club or campsite, by whatever, name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including architects or interior decorators, shall be the place where the immovable property is located or intended to be located. In the view of the above, the place of provision of the said services received by them is outside the taxable territory under both the above mentioned rule, i.e. Rule 4(a) and Rule 5 of PoPSR. That, even if for the sake of argument, it is assumed that Appellant is liable to discharge service tax in F.Y. 2011-12 considering the rule 7 of the POT Rules and rule 3(iii) of the Import of service rules as held in the impugned order on the ground that the such service has been received by a recipient located in India for use in relation to business or commerce, in this respect, the Appellant would like to place reliance on the judgment of Hon'ble Mumbai Tribunal in matter of Genom Biotech (P.) Limited. vs. Commissioner of Central Excise and Customs, Nashik ([2016] 71 taxmann.com 123 (Mumbai- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his amount is legally not sustainable. A (2) As against above arguments the Learned AR of the department has re-iterated the findings in the impugned order that the appellant in defense reply has shown to have incurred an amount of Rs. 9,17,72,871.00 during the financial year 2011-12, towards engineering support services received for Ruwais project and they have claimed that the services have been consumed outside India and service tax shall not be attracted on such services for period from April 2011 to March 2012. But the invoice has been issued dated 12.12.2012 in relation to their project in Ruwais, for the services provided during the financial year 2011-12 to the appellant. That as per proviso in Rule 7 of Point of Taxation Rules, 2011 as existed prior to 01.04.2012 in case of associated enterprises where the person providing the service is located outside India, the point of taxation shall be the date of credit in the books of account of the person receiving the service or date of making the payment whichever is earlier. Accordingly, the taxability will be determined in the year 2011-12. Further, the impugned services will be covered as per the provisions of Rule 3(iii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Rule 3(i) and 3(ii) of the Rules 2006 ibid and which do not cover the services under Section 65(105)(g) of the Finance Act, 1994. We find that the similar issue has already been decided by the Tribunal in the case of 2019 (20) G.S.T.L. 259 (Tri. - Mumbai) in the case of EMI Transmission Limited vs. Commissioner Of Central Excise, Nashik The relevant extract of the order is reproduced below :- 5 . We have carefully considered the submissions made by both the sides. We find that the demand of Service Tax on the Technical Testing Analysis service was raised on the basis of Rule 3 of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, which reads as under : 3. Taxable services provided from outside India and received in India. - Subject to Section 66A of the Act, the taxable services provided from outside India and received in India shall, in relation to taxable services,- (i) specified in sub-clauses (d), (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), (zzzh), (zzzr), [(zzzy), (zzzz) and (zzzza)] 1 of clause (105) of Section 65 of the Act, be such services as are provided or to be provided in relation to an immovable property situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble territory i.e. foreign country for this reason it is not taxable. In this regard we find that after omission of Clause (zzh) w.e.f. 1-4-2011 Technical Testing and Analysis service even though only performed outside India shall be liable to Service Tax as per Clause (iii) of Rule 3 of Rules, 2006, according to which, the only requirement is that service are received by a recipient located in India for use in relation to business or commerce. There is no dispute that technical testing and analysis service though wholly performed outside India but the same was received by the appellant in India which was indeed used in relation to business or commerce. Therefore after 1-4-2011, the service of technical testing and analysis is clearly chargeable to Service Tax. 4.2 In view of the above discussion, we hold that the professional fees/ Engineering charges which are considered under the expression Consulting Engineering Services were chargeable to service tax during the relevant period. B. Corporate cost allocation: The corporate cost allocation and other charges as reflected in the schedule of foreign currency expenditure indicate the salary expenses of employees of grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant and said employees work under the complete supervision, control and management of the Appellant during secondment. For the same, the Appellant remunerates the said seconded employee by way of payment of salary and other benefits. In this regard, for the purpose of the administrative convenience of the seconded employees with regard to meeting of their requirements in their home country a portion of salary payable by the Appellant is disbursed by group companies to the designated overseas account of the seconded employees. The group companies initially pays the portion of the salary costs of the seconded employees to their designated overseas account and raise a debit note of said amount on the Appellant. The Appellant would reimburse the group companies for the exact actual amount paid by the group company, based on the debit notes from the group company on a periodic basis. The said debit notes raised by group companies represent the amounts paid by group companies on behalf of the Appellant, to each of the seconded employees towards salary and emoluments, for the work performed by the seconded employees in India under the control, supervision and as employee of the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reserves the right to require the Assignee to undertake other duties which may reasonable be required. The Company reserves the right to terminate the assignment prior to the planned end date in the event that the Assignee is not taking care of his obligations. He argued that this clause is to safeguard the Appellant, in case the employees who are seconded are not performing their obligation, the Appellants can ask the Company to terminate the agreement. This observation of learned Adjudicating authority has no relevance in determining whether the employees were seconded, or manpower services were provided. (iii) It has been held The salary of the Assignee is split into two, one Home Currency Element and another is Host Currency Element and approximately 80% of the salary is paid at home country and tax involved on the same is paid in home country, i.e. Germany, of the employee. The Assignee is paid nearly 20% of their salary in India and the income tax involved on this amount is only paid in India. Contradicting the same he argued that the Appellant has duly deducted tax at source on the entire amount of salary received by the seconded employees, paid in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able under reverse charge mechanism ( ROM ) by the Appellant on the amount of corporate cost allocations under the service category of Consulting Engineer Services . In this regard, the Appellant has made detailed submissions vide Para E29 to E56 of the Appeal to substantiate non-applicability of Service tax on the said reimbursements along with additional submissions filed from time to time based on legal/ judicial developments. However, during the course of the personal hearing before the Hon ble Tribunal on 12th January 2023, the department representative alleged the nature of services to be Manpower Supply Services and demanded payment of Service Tax under RCM relying upon the decision of the Hon ble Supreme Court in the matter of M/S Northern Operating Systems Pvt Ltd. (supra).Therefore, they are not liable for service tax on the corporate cost allocation expense amounting Rs. 27,10,12,363/- 4.5 Learned Counsel has argued that Appellant's group company does not hold any power in respect of the seconded employee during the secondment period; Group company is transferred into dormant status during the secondment period. On completion or termination of the secondment co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which may reasonable be required. These duties would take into account the nature and status of the role of appointment, qualifications and experience. If it is necessary to end an assignment ahead of the planned end date, the Company will give 3 months notice (depending on an important reason due to the personal situation of the Assignee also a longer appropriate time limit will be applied but not longer than six months) of the impending repatriation to the Assignee iv. Clause 4 Remuneration abroad. (a) Salary The gross assignment base pay for assignment purposes will be Euro 109800 per annum. The net assignment pay has been calculated in accordance with the attached salary buildup schedule. It is quoted partly in the home country and party host country as follows: Home Currency Element: Euro 89130 net paid out in the home country. Host Currency Element: INR 13 18875 net paid out in the host country. (b) Payment delivery The remuneration will be transferred into bank account to be designated by the Assignee in India and Germany. There will be no reimbursement of any costs relating to international cash transfer or exchange rate difference. (c) Home ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnee remains covered by the social security system in his home country Germany, if possible. The Company will continue to pay the applicable employer's and employee's social security contributions with respect to old age and unemployment insurance to the home scheme. If possible, the Company will apply for the exemption from the host social security scheme. x. Clause 10 : Medical care abroad/Accident insurance for dependents. For the duration of Employee's residence in the foreign country, Linde will conclude an insurance policy covering medical care abroad with the Hallesche Insurcrs. During the assignment abroad the Company will take out an accident insurance for the Assignee and the Company will cover the premium costs. xi. Clause 11 Taxation. The assignment salary is quoted net based on the Tax Equalization Policy of the Linde Group. The host company will meet any host tax and social security arising from assignment salary benefits. xii. Clause 14 Final provisions. a. The Assignee shall inform the Company without undue delay of any changes in his personal details. The Assignee assure the Company that he can be contac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol over these things. Even in case, the Assignee is not taking care of his obligations, the Company , i.e. M/S Linde, AG or their group companies reserve the right to terminate the employee and the host Company, i.e., M/S Linde Engineering India Pvt. Ltd is not having any power to terminate or revert such employees. And above all German law is the proper law of this agreement. That despite the fact that the re-imbursement is made by the appellant, they do not the controlling power over the seconded employees. all these facts conclusively prove that the employees working in M/S Linde Engineering India Pvt. Ltd are acting or providing service in India on behalf of their employer, i.e. M/S Linde, AG, Germany. 4.6 Therefore, the payments under the head of corporate cost allocation made by the appellant in foreign currency to M/S Linde, AG and their group companies situated outside India are against the taxable services, viz. Engineering services provided by the persons situated outside India. That Assignment Agreements, commercial invoices and debit notes clearly reveal that that all the seconded employees are professionally qualified as engineers and highly technically qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel has stated that the remittance made by it to its subsidiary in relation to bank guarantee commission charges pertain to the bank guarantee obtained by Linde AG Germany (LAG), the parent company of the Appellant on behalf of the Appellant for its various projects. The bank guarantee is obtained by M/s. LAG from a bank situated outside India. Since the bank guarantee is to be given for a project in India to appellant s customer in India, the foreign bank routes the guarantee through its Indian branch and obtains the guarantee from an India bank. The Indian bank issues the bank guarantee in favour of the Appellant on the basis of request given by the foreign bank. The Indian branch of the foreign bank forwards the advice of charges of the Indian bank issuing the guarantee as well as its own service charges to the requesting foreign branch. The foreign bank then forwards the bank guarantee advice to M/s. LAG including the charges levied by the Indian bank and the Indian branch of the foreign bank. It is to be noted that the charges levied by the Indian bank and the Indian branch of the foreign bank would have already suffered service tax. Such charges paid by the Appellant are r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that no service tax has been discharged on theses invoices; prima facie these Debit Notes are raised by M/s. Linde, AG for the services provided by them for procuring the bank guarantees; therefore, the appellants submission that no service tax is leviable under reverse charge mechanism on such services is contrary to facts and against the prevailing legal provisions of charging service tax on the services received by them from persons situated outside India; therefore, the appellant s submission that no service tax is leviable under reverse charge mechanism on such services is contrary to facts and against the prevailing legal provisions of charging service tax on the services received by them; that the payments made by the assessee are aptly covered under the import of services and the bank guarantee received by the appellant for its various projects in India was a service received by them and the charges paid for it have to be taxed in India; that the service tax paid by the banks is in no way connected to the present issue as the appellant is the recipient of a service from M/s Linde, AG and have paid for the same. 5.4 We find that the matter is finally settled by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir defense; still the appellant has not produced any documentary evidence to substantiate their claim that no service tax is leviable on the Bank charges of Rs. 1,30,167.00 paid in foreign currency; therefore, the appellant is liable for payment of service tax under reverse charge mechanism on the expenditure incurred by them in foreign currency amounting to Rs. 1,30,167.00 under the head of bank charges as per the provisions of Section 66A read with Section 66 and 68 of the Finance Act, 1994 for the period prior to 1.7.2012 under Banking and other financial services and as per the provisions of Rule 2(d)(i(G) of the Service Tax Rules,1994 read with Section 66B and 68 of the Finance Act, 1994 for the period from 1.7.2012. 6.2 We find that the appellant has claimed that the impugned charges are bank commissions providing various services with respect to foreign remittances. Service tax is already charged by the banks and only dispute is that the appellant failed to substantiate that these amounts are against bank charges. We remand the case back to the adjudicating authority with the directions to the appellants to provide all supporting documents with respect to their contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gy software, including conducting feasibility studies on implementation of a system, specifications for a database design, guidance and assistance during the startup phase of a new system, specifications to secure a database, advice on proprietary information technology software, acquiring the right to (v) use information technology software for commercial exploitation including right to reproduce, distribute and sell information technology software and right to use software components for the creation of and inclusion in other information technology software products, acquiring the right to (vi) use information technology software supplied electronically. 7.1 In respect of taxability on Software services received from 1.7.2012, the relevant provisions as under: i. Further, as per the provisions of 66B, there shall be levied at the specified rate on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may specified. ii. Section 65B (44) of the Finance Act, 1994 defines the term Service, mean any activity carried out by a perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be set aside with regard to these goods. 8.1 Learned AR on the other hand has submitted that as the appellant has failed to provide any documentary evidence that the balance amount of Rs. 1,89,905/- has been made in foreign currency was on account of purchase of software, service tax is to be levied on the same under reverse charge mechanism. 8.2 We are of the considered opinion that under the service tax law all payments received or paid to the foreign parties by the assessees against any service provided/ received from abroad (i.e other than goods, immovable property or money/actionable claims) are subject to tax unless those are brought under specific exception. Once a discrepancy has been brought to the notice of the assessee for a particular amount, onus lies upon him to prove that the amount was not taxable. Having failed to prove that the amount received in foreign currency was not subject to tax liability, we uphold the demand of service tax in this regard. (F). OTHERS 9. The Appellant submits that the payments made under the head 'others' are in relation to various types of expenses such as: Particulars Amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities. There is no underlying supply for the expense incurred in this regard. The nature of payment paid by the Appellant is merely a tax payment. The Appellant wishes to reiterate the fact that the payment has been made for compliance of a law being in force in a foreign country and not for a service provided by the government of the said foreign country and hence the said payment fails the very test of being regarded as a consideration towards receipts of any service. 9.2 On the other hand Learned AR has argued that the Appellant has not submitted any invoices or contracts or any other documents in support of their claim that the same are not taxable in India. Further, the Adjudicating authority found that the submission of the Appellant has not made any reason for, why the Appellant have made payments of tax to the foreign governments on the income earned by their employees in the foreign country. It was observed that the tax collected by any government on the income earned by employee is paid by the employee by himself/herself. If the tax on income earned by the employee is paid by the Appellant, then it has to be included to his income or the payments of the services pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imbursement of the expenses incurred by Linde AG. He referred the Hon'ble Supreme Court judgment in case of UNION OF INDIA AND ANR. V. M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357-SUPREME COURT that service tax is not applicable on the reimbursement of expenses on the ground that there is no service element involved therein. He further argued that even if for the sake of argument, it is assumed that the underlying expense would form part of the gross amount charged for providing engineering services by the group entity, then even in that case no service tax is levied on the corporate cost allocation expense. 10.1 The Ld. AR on the other hand has argued that whereas invoice no. 33084010 dated 27.08.2013 issued by Cryostar SAS to M/s Cryostar India, Division of M/s. Linde Engineering India Pvt. Ltd., was issued for Working Clothes and they have charged 597.57 Euro (INR 48893.00), the same has been issued for purchase of goods and the service tax demand has already been dropped in the adjudication order But a Debit Note No. 8026180 dated 05.11.2013 was issued by SELAS Linde GMBH to M/s Linde Engineering India Pvt. Ltd , wherein they have charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trieval' means providing data or information, retrievable or otherwise, to any person, in electronic form through a computer network. ' and as per Para 5-9-5 of the Service tax education guide which reads as 'Online information and database access or retrieval services are services in relation to online information and database access or retrieval or both, in electronic form through computer network, in any manner. Thus, these services are essentially delivered over the internet or an electronic network which relies on the internet or similar network for their provision. The other important feature of these services is that they are completely automated, and require minimal human intervention. Examples of such services are:- (ii) digitized content of books and other electronic publications, subscription of online newspapers and journals, online news. flight information and weather reports ; the underlying expense can be classified under the category of 'On-line information and database access or retrieval service' ('OIDAR services); that for the period April 2011 to June 2012, the Appellant relies on the judgment of ROYAL WESTERN I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the specified services. Therefore, they cannot be considered to be taxable before 01.07.2012. Further, the impugned service was duly covered under Section 65(72) under ODIAR services which were taxable at the end of service provider. As the service providers were outside India, the service cannot be taxed in India. We therefore set-aside the demand for the service under the head Purchase of books and magazines . (iv) Other (a) REIMBURSEMENT OF INSURANCE CHRGES (b) REIMBURSEMENT OF RELOCATION CHARGES OF EMPLOYEES (c) SCHOOL FEES (d) REIMBURSEMENT OF SALARY PLUS OTHER REIMBURSEMENT (a) REIMBURSEMENT OF INSURANCE CHRGES 12. The Ld. Counsel has argued that the employees of group companies of the Appellant come on secondment and work in India; as per the employment contract which binds the Appellant and the employees of the Appellant in employer employee relationship, the Appellant is bound to reimburse health insurance premium paid by the group company of the Appellant to the insurance company situated outside India; the said payment has not been made by the Appellant for availing any services; that such payments have been made pursuant to the employment c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everse charge basis as per Notification No. 30/2012 dated 20 June, 2012 does not arise and the impugned services have been specifically excluded from levy of service tax by virtue of clause (l) of section 66D of the Finance Act. Hence, the liability to pay tax on the said services under consideration does not arise. (d) REIMBURSEMENT OF SALARY PLUS OTHER REIMBURSEMENT 12.3 The Learned Counsel has argued that that the payments made by the Appellant are either of the nature of corporate cost allocation or reimbursement of expenditure incurred by employees or not in relation to expenses leviable to service tax; that the Appellant would also like to submit that as per the provisions of the Finance Act, the underlying expenses would be covered under employee-employer relationship and hence the liability to pay service tax does not arise. 12.4 On the other hand Learned AR has reiterated the findings in the adjudication order that all these expenses i.e. REIMBURSEMENT OF INSURANCE CHRGES , REIMBURSEMENT OF RELOCATION CHARGES OF EMPLOYEES , SCHOOL FEES and REIMBURSEMENT OF SALARY PLUS OTHER REIMBURSEMENT were incurred by them in corporate cost allocation and that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs in the impugned order that they have not submitted any documentary evidences to prove that the payments have been made for demurrage charges to the port authorities situated outside taxable territory; that the Hon'ble CESTAT, Ahmedabad vide Order No. A/10699/2020 dated 26.02.2020 has remanded the matter to the adjudicating authority for passing afresh order, in view of the appellant s submission before the Hon'ble Tribunal that they are in a position to submit all documents in support of their defence; that as per findings in the adjudication order, still the appellant has not produced any documentary evidence to substantiate their claim that no service tax is leviable on the expense of Rs. 24,860.00 as demurrage charges paid in foreign currency. 13.3 We are of the considered opinion that under the service tax after law all payments received or paid to the foreign parties by the assessees against any service provided/ received from abroad (i.e other than goods , immovable property or money/actionable claims) are subject to tax unless those are brought under specific exemption. Once a discrepancy has been brought to the notice of the appellant for a particular amount, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is liable for payment of service tax on the amount of Rs. 12,77,668.00 under reverse charge mechanism as per the provisions of Section 66A read with Section 66 and 68 of the Finance Act, 1994 for the period prior to 1.7.2012 and as per the provisions of Rule 2(d)(i)(G) of the Service Tax Rules, 1994 read with Section 66B and 68 of the Finance Act, 1994 for the period from 01.07.2012. 15.2 We are of the considered opinion that under the service tax law after 01.07.2012 all payments received or paid to the foreign parties by the assessees against any service provided/ received from abroad (i.e other than goods, sale of immovable property or money/actionable claims etc.) are subject to tax unless those are brought under specific exception. Once a discrepancy has been brought to the notice of the assessee for a particular amount, onus lies upon him to prove that the amount was not taxable. Having failed to prove that the amount paid in foreign currency was not subject to tax liability, we uphold the demand of service tax in this regard. 16. The learned Counsel has also contended that the impugned show cause notice is hit by time limit provided under Section 73 of the Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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