Custom, Excise & Service Tax Tribunal
M/S. Tpsc (India) Pvt. Ltd vs Cc,Ce&St, Hyderabad-Iv on 16 December, 2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Division Bench Court I Appeal No.ST/26848/2013 (Arising out of Order-in-original No.09/2013-Adjn. (Commr.) ST dt. 19/03/2013 passed by CC,CE&ST, Hyderabad-IV) For approval and signature: Honble Mr. Justice G. Raghuram, President Honble Mr. C.J. Mathews, Member(Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. TPSC (India) Pvt. Ltd. ..Appellant(s) Vs. CC,CE&ST, Hyderabad-IV ..Respondent(s)
Appearance Shri Rajesh Kumar, CA for the appellant.
Ms. Sudha Koka, Addl. Commissioner(AR) for the respondent.
Coram:
Honble Mr. Justice G. Raghuram, President Honble Mr. C.J. Mathews, Member(Technical) Date of Hearing:16/12/2015 Date of decision:16/12/2015 FINAL ORDER No._______________________ [Order per: G. Raghuram] By the order dt. 09/07/2015 in Central Excise Appeal No.41 of 2014, the learned Division Bench of Honble High Court of Andhra Pradesh, while rejecting Revenues appeal against the predeposit order passed by this Tribunal on 28/08/2013, directed expeditious disposal of the appeal. The appeal is, therefore, listed today for hearing.
2. We have heard the learned consultant for the appellant and the learned AR for the respondent-Revenue. The appellant is the assssee and is aggrieved by the adjudication order dt. 19/03/2013 passed by the learned Commissioner of Customs, Central Excise and Service Tax, Hyderabad-IV. The impugned order confirms service tax demand of Rs.1,17,53,175/- along with interest and penalties, pursuant to proceedings initiated under two show-cause notices dt. 02/04/2012 and 19/10/2012, covering the periods 2008-09 to 2010-11 and 2011-12, respectively. The order also confirms levy of interest and penalties as stipulated therein, under Sections 75, 76, 77 and 78 of the Finance Act, 1994.
3. The appellant incurred expenditure in foreign currency towards salaries paid to employees of M/s. Toshiba Plant Systems & Services Corporation, Japan, who were deputed and seconded for employment with the appellant during the relevant period. The foreign remittances by the appellant were pursuant to an agreement dt. 01/10/2007, covenanting remittances of employees remuneration. This agreement was between the appellant and the overseas company. Under the terms of the agreement, certain categories of employees, are to be deputed/transferred to the appellant and during the tenure of such secondment, they are treated as appellants employees. The remuneration payable to such seconded employees is remitted to the overseas principal employer for being credited to the accounts of the seconded employees, after deducting the TDS component as mandated by provisions of Income Tax Act, 1961.
4. Revenue initiated proceedings on the premise that the overseas company had provided manpower recruitment and supply agency services, enumerated in Section 65(105)(k) of the Finance Act, 1994. Since the overseas company had allegedly provided this taxable service, proceedings were initiated against the appellant for remittance of tax, under the reverse charge mechanism.
5. The issue is no longer res integra. Identical circumstances of secondment of employees and remittances by an India employer of remunerations of seconded employees to the foreign substantive employer are held to fall outside the ambit of the manpower recruitment and supply agency service, in several decisions of this Tribunal and by several High Courts as well. The Honble High Court of Gujarat in CST Vs. Arvind Mills Ltd. [2014(35) STR 496 (Guj.)], the Allahabad High Court in CCE Vs. Computer Sciences Corporation India Pvt. Ltd. [2015(37) STR 62 (All.)] and this Tribunal in Volkswagen India (Pvt.) Ltd. Vs. CCE, Pune-I [2014(34) STR 135 (Tri. Mumbai)] and in ITC Ltd. Vs. CST, New Delhi [2013(29) STR 387 (Tri. Del.)] have consistently enunciated the principle that such transactions fall outside the ambit of manpower recruitment and supply agency service.
6. For reasons alike as set out in the consistent catena of precedents, we quash the impugned order and allow the appeal. No costs however.
(Pronounced and dictated in open court) ( G. RAGHURAM ) PRESIDENT Raja (C.J. MATHEWS) MEMBER (TECHNICAL) 4