Maithan Alloys Ltd. Vs CCE & ST (CESTAT Kolkata)
Material Facts: The appellant-assessee, M/s. Maithan Alloys Ltd., is a manufacturer of Ferro Alloys paying central excise duty. During the course of business, the assessee paid remuneration to four whole-time directors on its Board. The remuneration comprised both fixed and variable components, with the variable component consisting of a commission calculated as a percentage of profit in accordance with the Companies Act. The assessee deducted Income Tax at source (TDS) under Section 192 of the Income Tax Act, 1961 (applicable to salaries) and reflected the deposits in Form 26AS. Service tax was regularly paid under Reverse Charge Mechanism (RCM) on remuneration paid to other non-whole-time directors, whose TDS was deducted under Section 194J of the Income Tax Act. The Department issued a Show Cause Notice dated 12.03.2014 proposing a demand of service tax under RCM on the remuneration paid to the whole-time directors.
Procedural History: The Commissioner passed the Order-in-Original dated 30.11.2015, confirming a service tax demand of Rs. 70,54,065/- for the period August 2012 to March 2013, along with interest and penalty. Aggrieved by this order, the assessee filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata.
