Directors' Remuneration Exempt from Service Tax: Employer-Employee Relationship Recognized Under Income Tax Act Provisions

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....CESTAT allowed the appeal, setting aside service tax demand and penalties against the company regarding directors' remuneration. The tribunal recognized an employer-employee relationship between the company and its directors, establishing that salary payments subjected to TDS under Income Tax Act are excluded from service tax liability. The court found the remuneration constituted salary, not taxable services, and therefore reversed the original tax assessment. Consequential relief was granted consistent with existing legal precedents on director compensation taxation.....