TaxTMI 
TaxTMI 
2017 (12) TMI 965
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....s employees in Japan (III) Whether M/s.DIL provided manpower recruitment or supply service to the appellant during the 2005-06 to 2006-07 or not (IV) The demand of service tax under consultancy service during the period 2007-08 and payment made to DIL. (V) Whether the appellant received consultancy service from M/s.DIL, Japan and whether technical consultancy fee paid by the appellant to DIL, Japan during 2004-05 and 2005-06 is liable to pay service tax under reverse charge mechanism under consultancy engineering service. 2. A show cause notice was issued and, in adjudication, the Commissioner has confirmed the demand of Rs. 3,66,46,339/- for issue No.I and issue No.III, along with Education cess and SHEC for 2006-07. The adjudicating authority confirmed the demand of Rs. 21,31,277/- for issue No.II and issue no.IV which already stands deposited by the appellant and stands appropriated. He dropped the demand of Rs. 22,33,537/- for issue no.III (for the year 2005-06) and issue No.V (for the year 2004-05 & 2005-06). He also imposed penalties under Sections 76, 77 and 78 of the Finance Act, 1994. 3. Learned Advocate for the appellant submits that on th....
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....ry, were selected by the appellant. These foreign nationals were taken on payrolls of the appellant and worked under direct control and supervision of the appellant. Their salaries were paid by the appellant partly in India and partly in Japan. Portion of salary to be paid in Japan was directly credited by M/s.DIL, Japan to their accounts. This amount was reimbursed by the appellant to M/s.DIL, Japan. She relied upon the judgements in the case of Arvind Mills Vs. CCE-2014 (34) STR 610 (Tri.-Ahmd.). The above judgment has been affirmed by the Gujarat High Court in the case of CST Vs. Arvind Mills Ltd.-2014 (35) STR 496 (Guj.). She also relied upon the case law of Computer Sciences Corporation India Pvt.Ltd. Vs. CCE, Noida-2014 (35) STR 94 (Tri.-Del.) and Volkswagen India Pvt.Ltd. Vs. CCE-2014 (34) STR 135 (Tri.-Mum.) (maintained at 2016 (42) STR J145 (SC). On issue No.IV, she pleaded that penalty was not imposable as situation was revenue neutral. She relied on the decision of this Tribunal in Jain Irrigation Systems Ltd. vs. CCE-2015 (40) STR 752 (Tri.-Mum.) 6. Ld.Advocate further argued that even assuming that M/s.DIL was providing services to the appellant, no service tax c....
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....Delhi-2014 (36) STR 766, this Tribunal has held as below: "51. Even otherwise also, I find that the disputed service is the service being provided by the appellant to his principal located in Singapore. The marketing operations done by the appellant in India cannot be said to be at the behest of any Indian customer. The service being provided may or may not result in any sales of the product in Indian soil. The transactions and activities between the appellant and Singapore principal company are the disputed activities. As such, the services are being provided by the appellant to Singapore Recipient company and to be used by them at Singapore, may be for the purpose of the sale of their product in India, have to be held as export of services. 12. The similar view has been taken in the following cases: (1) Paul Merchants Ltd Vs.CCE-2013 (29) STR 257 (Tri.) (2) GAP International Sourcing India Pvt.Ltd. Vs. CST, Delhi-2015 (37) STR 230 (Tri.-Del.) (3) International Overseas ServicesVs. CST, Mumbai-2016 (41) STR 230 (Tri.-Mumbai) (4) Gecas Services India Pvt.Ltd. Vs.CST,New Delhi-2014 (36) STR 556 (Tri.-Del.) (5) Samsung India El....
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....mployment between Indian company and foreign national employees has also been enclosed. We find that the issue of payments made to employees of the foreign company deputed to its Indian partner is no longer res integra. The issue is covered by the judgement of the Hon'ble Gujarat High Court in the case of CST Vs. Arvind Mills Ltd.-2014 (35) STR 496 (Guj.) wherein this Tribunal has held as below: "6. We have to examine the definition of Manpower Supply Recruitment Agency in background of such undisputable facts. The definition though provides that Manpower Recruitment Supply Agency means any commercial concern engaged in providing any services directly or indirectly in any manner for recruitment or supply of manpower temporarily or otherwise to a client, in the present case, the respondent cannot be said to be a commercial concern engaged in providing such specified services to a client. It is true that the definition is wide and would include any such activity where it is carried out either directly or indirectly supplying recruitment or manpower temporarily or otherwise. However, fundamentally recruitment of the agency being a commercial concern engaged in providing a....