TaxTMI 
TaxTMI 
2026 (3) TMI 412
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....rges applicable Service Tax under Reverse Charge Mechanism (RCM) under the category of 'Management Consultancy Service' in respect of the aforesaid services and avails Cenvat Credit thereof. Apart from the Management Consultancy Services, Department noted that certain employees of M/s VICAT S.A. have been deputed to India, for work under the control, direction and supervision of the appellant. The appellant has entered into individual employment agreements with such expats. A part of salary component is paid by the appellant into the bank account of the expats and balance salary, including the statutory contributions payable in France, is paid by the appellant to M/s VICAT S.A., who in turn remits the same to the bank accounts of the employees in France. 3. The appellant was subjected to Excise Audit during the course of which an objection was raised alleging non-payment of Service Tax on the salary re-imbursements made in respect of expatriate employees and paid to M/s VICAT S.A. The appellant, vide letter dated 04.12.2013, clarified that the services rendered by the expats were in their personal capacity and not on behalf of the foreign company and that M/s VICAT S.A. had no r....
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....n is borne and paid by the appellant. 7. Learned Counsel for the appellant further submits that the appellant is the actual employer of expatriates and that M/s VICAT S.A. does not render any service, it merely facilitates disbursement of salary. Therefore, the reimbursement made to M/s VICAT S.A. not be treated consideration for any taxable service. 8. It is further submitted that no secondment agreement exists between the appellant and the foreign entity; therefore, the judgment of Hon'ble Supreme Court in the case of Commissioner of Central Excise, Customs and Service Tax, Bangalore (Adjudication) Vs Northern Operating System Pvt Ltd., [2022 (5) TMI 967 (SC)] is not applicable. In the instant case, the appellant entered into direct with the employees in their personal capacity, in contrast, in the case of Northern Operating System, supra, there existed a secondment agreement, the overseas employee where temporarily loaned to the Indian entity. In the present case M/s VICAT S.A. is not deploying personal under any service contract. Therefore, the Northern Operating system ruling is not applicable to the facts of the present case. 9. Learned Counsel for the appellant also....
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....he instant case the expats were engaged in executive and operational roles which go for beyond the functions of a management consultant and were performed in the course of their employment with appellant. In this regard, Learned Counsel for the appellant reliance is placed on the following decisions: (i) Basti Sugar Mills Co. Ltd., Vs Commissioner of Central Excise, Allahabad, [2007 (4) TMI 25 (Tri-Delhi), Maintained in 2007 (11) TMI 548] (ii) M/s Nirulas Corner House Pvt Ltd., Vs Commissioner of Service Tax, New Delhi [2008 (12) TMI 57 (Tri-Delhi)] (iii) BSR. & Co. Vs Commissioner of Service Tax, Gurgaon [2014 (8) TMI 227 (Tri-Delhi)] 14. Learned Counsel for the appellant further submits that the issue of inclusion of reimbursable expenditure in the taxable value is no longer res-integra in view of the judgment of the Hon'ble Supreme Court in Union of India Vs Intercontinental Consultants and Technocrats Pvt Ltd., [2018 (10) GSTL 401 (SC)]. The Supreme Court held that Rule 5 of the Service Tax (Determination of Value) Rules, 2006 was ultra vires of the Finance Act, as it sought to include reimbursable expenses in the value of taxable services without ....
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....[2025 (7) TMI 148 (Tri-Chennai)] (iv) M/s Dell International Services India Pvt Ltd., Vs Commissioner of Central Excise and Customs [2023 (2) TMI 183 (Tri-Bang)] (v) Tesco Bengaluru Pvt Ltd., Vs Commissioner of Central Excise and Service Tax [2025 (2) TMI 1054 (Tri-Bang)] (vi) M/s Halcrow Consulting India Pvt Ltd., Vs Commissioner of Service Tax [2024 (5) TMI 130 (Tri-New Delhi)] (vii) M/s AGS Customer Services (India) Pvt Ltd., Vs Commissioner of Service Tax-I [2024 (6) TMI 1113 (Tri-Mum)] (viii) M/s KSPG Automotive India Pvt Ltd., Vs Commissioner of Service Tax-I [2024 (4) TMI 682 (Tri-Mum)] (ix) M/s Renault Nissan Automotive India Pvt Ltd., Vs The Commissioner of G.S.T. and Central Excise [2023 (7) TMI 635 (Tri-Chennai)] 18. Learned Counsel for the appellant further submits that where the disputes involved interpretation of statuary provisions and the assessee had acted in accordance with prevailing judicial decisions, invocations extended period of limitation is not justified. 19. Per contra, Learned Authorized Representative for the Revenue submits that the appointment letters of Mr. Darondeau Herve dated July 20, 201....
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....e. 24. In support of above contention, Learned AR relied on CESTAT, Chennai decision in the case of Commissioner of GST & Central Excise, Chennai Vs M/s Chemplast Sanmar Ltd., [2023 (7) TMI 482] wherein, held that the services provided by the employee to the employer in the course of employment are outside the ambit of services. Whereas, services provided outside the employer - employee relationship for consideration would be eligible of tax. 25. Learned AR also placed reliance of the Larger Bench of the CESTAT Bangalore in the case of Bhagavathy Traders Vs Commissioner of Central Excise, Cochin [2011 (8) TMI 430] wherein, it was held that where the service recipient legal or contractual obligation to pay certain amounts to a third party and such amounts are paid by the service provider on behalf of the service recipient, the question of reimbursement of expenses incurred on behalf of the recipient arises. It was further held that there is no justification or legal authority to artificially split the cost towards provision of services. 26. Learned AR further places reliance on the decision in the case of Commissioner of Central Excise and Service Tax, Surat Vs Jalaram Secu....
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....tionship. His another ground is that reliance of the Department of the Hon'ble Supreme Court judgment in the case of CCE & ST, Bangalore Vs Northern Operating System Pvt Ltd., [2022 (5) TMI 967 (SC)] is not applicable to the facts of the present case. He has also relied on the fact that the CBIC vide it's instruction no. 05/2023-GST dated 13.12.2023 clarified that the judgment in the case of Northern Operating System Ltd., cannot be applied mechanically to all secondment cases. He is also submitting that the amount re-imbursed by the appellant to VICATSA is in the nature of re-imbursement of part salary paid by them to the employee in foreign country and as such reimbursable expenditure are not taxable in view of judgment of the Hon'ble Supreme Court in the case of Union of India Vs Intercontinental and Technocrats Pvt Ltd., [2018 (10) GSTL 401 (SC)]. He is also submitting that in the facts of the case, extended period of limitation cannot be relied upon and that the matter is revenue neutral in as much as whatever service tax is paid will be available as credit. 30. Therefore, the first and foremost issue we decide is whether the judgement of Northern Operating System Pvt Ltd.,....
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....gn currency Global Repatriation Policy Repatriation of the employees will be in accordance with this policy (para 49) No such policy exists 31. We also find that it is not in dispute that the appellants have been paying applicable service tax in respect of management consultancy services provided by VICAT S.A. We also note that some of these employment agreements/letters were entered well before the management consultancy agreement, which would support the submission that the employment of executive members was not pursuant to any service arrangement with any foreign entity but due to certain independent partial needs. Moreover, in the case of Northern Operating System Pvt Ltd., supra, it has been specifically observed that the nature of service will be that of service of manpower supply. Whereas, in this case, the proposal itself has been made under the Management Business Consultancy Service. Therefore, this case cannot be decided based on the observation and decision of the judgment of Hon'ble Supreme Court in the case of Northern Operating System Pvt Ltd., supra. 32. We find that in support of the fact that they were employee of the appellant, they have taken int....