2021 (5) TMI 832

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....hether the Managing Director and whole time Executive Director of the appellant company are its "employees" and the remuneration paid to them is in the nature of "Salary" and hence whether falling outside the definition of "Service" under section 65B(44) of the Finance Act,1994. 2. Shri Paresh M Dave, Learned Counsel appearing on behalf of the appellant submits and argued the case in detail and he has also submitted consolidated note of written submission dated 15.02.2021. As per his submission both the directors are the employees of the company and they were paid salary. In this regard he heavily placed reliance on income tax return filed by both the directors in Form-16 wherein the remuneration paid by company to the said directors wer....

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....nded period of the demand could not have been invoked. All the details about the remuneration paid to the directors in question were noticed by the Central Excise Revenue Auditors (CERA) through the appellant's audited books of accounts and balance sheet and thus all the relevant details about the remuneration paid to the directors were disclosed in the audited accounts and balance sheet before Income Tax Authorities as well as the Registrar of Companies, there was no suppression of fact by the appellant. He further submits that the appellants are paying substantial amount of excise duties in cash throughout the business operations including the period in question and therefore if service tax was paid on directors' salary then the same coul....

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....f the appellant. We find that though in the Income tax return the remuneration was declared as salary income but it is a self declaration. However, whether such income is a salary income or otherwise the same can be established on the basis of employment conditions for employment of directors as company's employees. In the entire proceedings the appellant have not produced the appointment order of the directors as employees containing the terms and conditions of the employment. On the basis of terms and conditions of the employment of directors as employees it can be ascertained whether the directors are employees or otherwise which is the root of the entire issue. Therefore, we are of the view that matter needs to be reconsidered taking in....