2013 (11) TMI 298

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....oup Company and have been assigned under the group's policy to work in the appellant company. The appellant have challenged the following orders-in-original as per tabled below:- Appeal no. Order-in-original no. & date Service tax demand Period ST/277/11 PI/Commr/ST/15/2011 dated 25.1.11 7,31,38,617/- May, 2007 to December, 2009 ST/496/12 PI/Commr/ST/18/2012 dated 17.4.2012 4,73,54,828/- January 2010 to Dec 2010 ST/862/12 28/RKS/ST/P-I/2012 dated 21.9.2012 4,23,15,581/- January 2011 to Dec 2011 2. The brief facts of the case are that the appellant is a manufacturer of passenger vehicles and is registered under the provisions of Central Excise Act, 1944 and Finance Act, 1994 having Service T....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....behalf of the foreign company. The appellant also have a right to promote/discipline/suspend/take any action/terminate the services of such global employee at any point of time in accordance with its applicable policies without seeking any permission from the foreign company. Further, the other group company/foreign company will not have any obligation towards the appellant with regard to the performance of the global employee nor the foreign company shall enjoy any right, title to or interest in or be responsible for the work of global employee or assume any risk for the results produced from the work performed by the global employees while under employment with the appellant. Further, it is provided that during the period of employment wi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....iding any type of services with regard to employment of the global employees with the appellant. It is further made clear that there is no direct or indirect consideration/charges (in cash or kind) payable by the Indian company to the foreign company or the vice versa in this connection. 2.3 Further, a copy of separate agreement with one individual global employee is also placed on record (Annexure-A) wherein the Remuneration clause is as follows:- "REMUNERATION 2.1 Salary Your remuneration will be paid as follows:-    * Part of your net salary will be paid by the company into your valid account in Germany (through the disbursing agent, (VW AG) at the end of each calendar month)    * The balance part of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ower recruitment or supply agency services" received from foreign companies should not be demanded and recovered from them under the provisions of Section 73(1) of the Finance Act, 1994.    (b) Interest at appropriate rate should not be charged and recovered from them under the provisions of section 75 of the Act.    (c) Penalty should not be imposed on them under section 76 of the Act.    (d) Penalty should not be imposed on them under Section 77 of the Act. 2.5 The appellant have replied to show-cause notice and contested the proposed demands, but the same were confirmed and penalties were imposed under sections 76 and 77 of the Finance Act, 1994. Interest was also demanded under the provisions of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng/foreign company. Merely because a part of the salary of such global employee was paid in their home country through the holding/foreign company, it cannot be said that the foreign/holding company rendered supply of manpower or labour to the appellant. He also placed reliance on the decision of the Tribunal in the case of ITC Ltd. vs. Commissioner of Service Tax, Mumbai, New Delhi and Paramount Communication Ltd. vs. Commissioner of Central Excise, Jaipur, in support of his contentions. 3.2 It is further contended that the holding/foreign company is not a "manpower recruitment or supply agency service" as required under section 65(105)(k) of the Finance Act, 1994. Further, reliance is placed on CBE & C Circular no. 96/7/2007-ST dated 2....