TaxTMI 
TaxTMI 
2019 (2) TMI 955
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....d have been issued STC No. AADCT2257JSD002. The appellant entered into three Expatriate Agreements with following subsidiaries:- (a) M/s Unitech Wireless (Tamil Nadu) Pvt. Ltd. dated 23.07.2009. & (b) Unitech Wireless (Tamil Nadu) Pvt. Ltd. dated 03.02.2010. & (c) Telenor India Pvt. Ltd. dated 29.06.2009 (three of the subsidiaries are hereinafter called as Company). All the three Agreements are identical except for the agreeing parties and have been executed for Supply of Manpower for Personnel to be provided from time to time by Telenor Consult AS. Such Personnel would take up various positions in the Company in the supervision and control of Company itself, however they continue to the employees of the appellant. As per the said agreements, sub clauses 6.2 and 6.3 thereof a certain sum is invoiced and received by the appellant from the company whereas certain benefits are paid directly by the Company to the personnel provided by the appellant. Department formed an opinion that the plain reading of sub- clauses 6.2 & 6.3 of Expatriate Secondment Agreements, clarifies that the extra advantages/ benefits availed by the Personnel as per the sub clause 6.3 of t....
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.... to as the Act) read with Rule 2(1)(d)(iv) of Service Tax Rules is absolutely not sustainable. Both the provisions speak about the liability of service tax under reverse charge mechanism. Whereas, the appellant is admittedly a service provider. Further, SCN is challenged on following grounds as well: (i) SCN has wrongly alleged about appellant to not to have filed any ST-3 returns and to not to have paid the due service tax. It is impressed upon that the adjudicating authority themselves have acknowledged that the appellant has been paying service tax and has been filing service tax returns regularly. SCN has wrong allegations and this also is a reason for the same to be set aside. (ii) SCN has also been objected as being passed without jurisdiction as Commissioner (Audit) was not the competent authority to pass the impugned Order. (iii) SCN is the calculation about the proposed demand where even the amount on which service tax has been paid has also been included. Adjudication based upon such a SCN is not sustainable in this score itself. 3.1 Further, it is submitted that the adjudicating authority below has committed an error while invoking Rule 5 of Service Tax (Dete....
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.... foreign company is absolutely mis-conceived. The appellant admittedly is providing a taxable service. The payment thereof has been enumerated in Clause 6.1, 6.2 and 6.3 of the Expatriate Secondment Agreements entered into by the appellant with three companies in India. The amount received by virtue of three of these Clauses has to be the gross amount for the impugned taxable service but the appellant has artificially divided the said value into parts by raising bills/ invoices only for the amount received by them from the companies as per Clause 6.2 of the said Agreement whereupon the service tax has been paid but no service tax has been paid on the amount paid by the companies to the respective personnel directly. It is impressed upon that the Agreement itself clarifies that the extra benefits/ advantages availed of by the personnel under Clause 6.3 of the Agreement were liable to be included in the value of taxable service for the reason that the word used in Clause 6.1 is "all costs" in relation to personnel services provided by the appellant and the costs have been bifurcated in the value as mentioned in Clause 6.2 as well as in Clause 6.3. 4.1 It is further submitted that ....
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....rpiece" Plot #10, Golf Course Road, Sector 54, DLF Ph-V, Gurgaon (agreement dated 23.07.2009). 5.1 M/s Telenor Consult AS irrespective is a company under laws of Norway, but is registered with service tax Commissionerate, Delhi for manpower recruitment or supply agency services and business support services having STC No. AADCT2257JSD002 as is mentioned in the SCN. It has nowhere been disputed by the appellant. Rather the subsequent admission is that Telenor Consult AS has its office at 9th Floor, Hotel Le Meridien, Windsor Place, Commercial Tower, New Delhi and that the appellant is regularly filing the ST-3 Return qua the amount Telenor has received from the said Companies in India for providing personnels to them vide respective agreements. 6. In view of these apparent facts, we are of the opinion that the argument about appellant, undisputedly, being a foreign company is apparently false. The fact rather is that a company irrespective incorporated under laws of a foreign country, is supplying manpower to Indian companies through its India office which is duly registered in the territory of India. However, the another apparently admitted fact is the appellant is the servic....
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.... 2006 which have not been invoked in the SCN. Thus, it is held that Commissioner has gone beyond the scope of SCN. Law has been settled by Hon'ble Apex Court in the case Precision Rubber Industries P. Ltd. Vs. C.C.E., Mumbai 2016 334 E.L.T. 577 (S.C.) wherein it was held that SCN is foundation of any proceedings. A new classification at a subsequent stage is not sustainable. The Hon'ble Apex Court has further clarified that it won‟t even be advisable/ permissible for Revenue to re-open the case at the last stage by issuing a fresh SCN. In an early decision of Hon'ble Apex Court titled as C.C.E., Nagpur Vs. Ballarpur Industries Ltd. 2007(215) E.L.T. 489 (S.C.), it was held that SCN is the foundation in the matter of levy of recovery of duty, penalty and interest. No new case could have been set up or decided contrary to the SCNs. The view was reiterated by the Apex Court in the case of C.C.E. Vs. Gas Authority of India Ltd. 2008 (232) E.L.T. 7 (S.C.). Thus we are of the opinion that the Order under challenge is liable to be set aside on this score also. 8. Coming to another line of argument that the Order has wrongly invoked Rule 5 of Service Tax (Determin....
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....tter of credit, draft, pay order, travelers cheque, money order, postal remittance and other similar instruments but does not include currency that is held for its numismatic value; (c) "gross amount charged" includes payment by cheque, credit card, deduction from account and any form of payment by issue of credit notes or debit notes and book adjustment and nay amount credited or debited, as the case may be, to any account, whether called "suspense account" or by any other name, in the books of accounts of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise." The bare perusal makes it clear that the charge of service tax has to be on the value of the taxable service i.e. the value of service rendered by the appellant. In the present case taxable service is that of providing manpower supply which only can be brought to charge and nothing more. The quantification of the value of service can therefore never exceed the gross amount charged by the service provider for the service provided by him. The above provision makes it clear that the expenditure or cost incurred by the service recipient in the course of provid....
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....ed to be careful about getting acquainted with the latest laws especially the overruled decisions. 10. Though the Parliament again amended Section 67 of the Act by Finance Act, 2015 w.e.f. 14.05.2015 adding an explanation which lays down that consideration includes the reimbursement of expenditure or cost incurred by the service provider but the period in question for the present Appeal is prior 14.05.2015 hence the said amendment cannot be given a retrospective effect. The principle of law known for the purpose is, "lex prospicit non respicit" which means that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his balance have been retrospectively upset. The obvious basis of the principle against retrospectivity is the principle of fairness as it was observed in the case of L's Office Cherifien Des Phosphates Vs. Yamashita-Shinnihon Steam Ship Company Ltd. 1994 (1) AC 466. It was clarified in this case that the legislatures which modified accrued rights or which imposed obligations or imposed new duties or attached a new disability have to be treated as prospective unless the legislative intent is clearly to give the ena....
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.... of goods or materials supplied or provided free of cost by service recipient and used for providing the taxable service is to be included in computation of the gross amount. However, the Hon'ble Apex Court in that case has appreciated the scope of words "gross" and "charge" and clarified that the value of such goods/ materials used or for providing the taxable service cannot be added/ included in the gross amount to be charged by the service provider. Seeing from this angle also the findings of adjudicating authority below are not sustainable. 13. The order under challenge has also been objected for want to the jurisdiction. We observe that the impugned SCN has been issued by Superintendent Service Tax, Audit -1 and the Order under challenge has been announced by Commissioner Service Tax Audit - 1. As per the Department‟s own Circular No. 985/9/2014-CX dated 22.09.2014 which discusses about organization structure of Audit Commissionerates as well as the functions thereof has clarified as : "Audit Commissionerate shall issue the SCN whenever necessary after the audit objections are confirmed in the Monetary Committee Meetings (MCM). The SCN shall be answerab....