The seconded employees remained employees of the overseas entities, thus exempting service payments from tax under the manpower recruitment category, with the service relationship defined by employer-employee law rather than taxable service definitions.

1. The Commissioner of Central Excise and Service Tax (hereafter variously described as "the revenue" or "the appellant") has preferred appeals (Under S.35L (b) of the Central Excise Act, 1944 .), directed against the impugned orders of the Customs, Excise and Service Tax Appellate Tribunal (hereafter "CESTAT") (Dated 23.12.2020 in Service Tax Appeal (STA) Nos. 22573-74/2014; STA No. 21502/2017, Service Tax / CROSS / 21077/2017 and Service Tax / CROSS / 20255/2018 ) which set aside two orders dated 03.03.2014 and 04.03.2014 by the Commissioner of Service Tax (hereafter "the Commissioner"). The Commissioner had confirmed demands, made through show cause notices, for service tax along with interest and penalty. The commissioner had discharged, by an order (dated 27.02.2017/16.06.2017) the proceedings arising from another show cause notice (hereafter "SCN") in respect of a similar demand. That led to the revenue's appeal to CESTAT, challenging that order, discharging proceedings inflated by the revenue for the subsequent period. The CESTAT, by its common order, rejected the revenue's appeals, and allowed that of the respondent, Northern Operating Systems (Pvt.) Ltd. (hereafter "the assessee" or "NOS"). Facts of the case

2. The assessee was registered with the revenue, as a service provider under the categories of "Manpower Recruitment Agency Service", "Business Auxiliary Service", "Commercial Training and Coaching Service", "TTSS", "Telecommunication and Legal Consultancy Service" etc., under the Finance Act, 1994 (hereafter "the Act"). Following an audit of the records by the revenue's officials, proceedings were initiated against the assessee alleging non - payment of service tax concerning agreements entered into by it with its group companies located in USA, UK, Dublin (Ireland), Singapore, etc. to provide general backoffice and operational support to such group companies.

3. The nature and contents of the agreements, are discernible in their description, extracted from the impugned order - where the assessee has been referred to as "the appellant" by the CESTAT - which is as follows:
"The relevant terms of the agreement to understand the activity are as follows:
a) When required Appellants requests the group companies for managerial and technical personnel to assist in its business and accordingly the employees are selected by the group company and they would be transferred to Appellants.
b) The employees shall act in accordance with the instructions and directions of Appellants. The employees would devote their entire time and work to the employer seconded to.
c) The seconded employees would continue to be on the payroll of the group company (foreign entity) for the purpose of continuation of social security / retirement benefits, but for all practical purposes, Appellants shall be the employer. During the term of transfer or secondment the personnel shall be the employee of Appellants. Appellants issue an employment letter to the seconded personnel stipulating all the terms of the employment.
d) The employees so seconded would receive their salary, bonus, social benefits, out of pocket expenses and other expenses from the group company.
e) The group company shall raise a debit note on Appellants to recover the expenses of salary, bonus etc. and the Appellants shall reimburse the group company for all these expenses and there shall