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Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
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<h1>CESTAT Kolkata: No Service Tax within Same Company</h1> The Appellate Tribunal CESTAT, Kolkata ruled in favor of the Appellants, waiving the pre-deposit requirement. The Department's attempt to levy Service Tax ... Service Tax on intra-company services - Taxability of services not rendered to any person outside the entity - Reliance on precedential ratio (Precot Mills Ltd.) - Waiver of pre-deposit on demonstration of prima facie caseService Tax on intra-company services - Taxability of services not rendered to any person outside the entity - Reliance on precedential ratio (Precot Mills Ltd.) - Demand of Service Tax on activities performed by one part of the company for another part where no service was rendered to any outside person was not sustainable. - HELD THAT: - The Tribunal found that the appellants had not rendered any service to any person outside the corporate entity. Applying the ratio of Precot Mills Ltd., the Tribunal concluded that such intra-company activities do not attract Service Tax. The Department did not place any contrary precedent before the Tribunal. On the facts as recorded, the demand was held unsustainable in law and the impugned order was set aside. The Tribunal also noted a prima facie case in favour of the appellants and, with consent of parties, waived the requirement of pre-deposit and proceeded to decide the appeal on merits. [Paras 4]Demand of Service Tax set aside as unsustainable where no service was rendered to any person outside the company; appeal allowed.Final Conclusion: The appeal was allowed and the impugned order demanding Service Tax was set aside on the ground that no taxable service was rendered to any person outside the company; pre-deposit requirement was waived on finding a prima facie case. The Appellate Tribunal CESTAT, Kolkata found in favor of the Appellants, waiving the pre-deposit requirement. The Department sought to levy Service Tax for activities within the same company, but since no service was rendered to an external party, no tax is payable. The decision was based on the case law of Precot Mills Ltd. The appeal was allowed, and the impugned order was set aside.
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