M/s Canon India Pvt Ltd Vs Commissioner, Goods & Service Tax (CESTAT Chandigarh)
The issue involved in the present case is in respect of levy of service tax on the amounts paid as salary to expats under the taxable category of Manpower Supply Services.
With effect from 01.07.2012, the law as introduced by the way of above amendments had changed the concepts of taxation of services. Whereas prior to this date tax was levied on the services defined to be taxable services, and Manpower Supply Services as defined by Section 65 (105)(k) was one of such taxable services. Since we are concerned with the period post 01.07.2012, the decisions which have held that the services provided by the appellant parent company were not covered by the definition of Manpower Supply Services, under Section 65 (105)(k) as it existed then will have no application to the facts of this case.
However, the judicial member have a view the same would be applicable. The matter is referred to larger bench of tribunal.
FULL TEXT OF THE CESTAT JUDGEMENT
The appeal No ST/61410/2018-CU(DB) is directed against Order in Original No GST/GGM/COM/SM/26/18-19 dated 29th June 2018 of the Commissioner Good and Service Tax, Gurgaon. By the impugned order, Commissioner held as follows:
i. I confirm the demand of Rs 2,17,99,762 (Rupees Two crore Seventeen Lakh Ninety Nine Thousand Seven Hundred and Sixty Two Only) and order the same to be recovered from the noticee under sub-section (1A) of Section 73 of the existing Finance Act, 1994 as amended, read with Rule 6 of existing Service Tax Rules, 1994
ii. I order for recovery of interest at the appropriate rate on the said recoverable amount of Service Tax including all cesses under Section 75 of the existing Finance Act, 1994.
iii. I impose a penalty of Rs 21,79,976/- (Rupees Twenty One Lakhs Seventy Nine Thousand Nine Hundred and Seventy Six only) under Section 76 of the existing Finance Act, 1994 upon the noticee for their failure to pay the appropriate Service Tax liability in accordance with the provisions of Section 68 of the existing Act;
iv. I also impose a Penalty of Rs 1 0,000/- (Rupees Ten Thousand Only) under Section 77 of the existing Finance Act, 1994 upon the noticee for their failure to furnish statutory ST-3 returns in the manner prescribed under Section 70 of the existing Act.”
1.2 The appeal No ST/60852/2019-CU(DB) is directed against Order in Original No GST/GGM/COM/Adj/Canon/128/18-19 dated 30th April 2019 of the Commissioner Good and Service Tax, Gurgaon. By the impugned order, Commissioner held as follows:
i. I confirm the demand of Rs 3,04,07,553 (Rupees Three crore Four Lakh Seven Thousand Five Hundred and Fifty Three Only) and order the same to be recovered from the noticee under Section 73 of the Finance Act, 1994.
ii. I order for recovery of interest at the appropriate rate on the said recoverable amount of Service Tax under Section 75 of the existing Finance Act, 1994.
iii. I impose a penalty of Rs 30,40,755/- (Rupees Thirty Lakhs Forty Thousand Seven Hundred and Fifty Five only) under Section 76 of the Finance Act, 1994 upon them.;
iv. I also impose a Penalty of Rs 1 0,000/- (Rupees Ten Thousand Only) under Section 77 of the Finance Act, 1994 upon them.”
2.1 Appellant herein are registered with the department for providing various services which were classifiable as taxable services under various categories up to 01.07.2012. Thereafter the services provided by them continued to be taxable as they were not covered by the negative list of services nor were exempted.
2.2 During the course of audit undertaken by the department it was observed that:-
