2022 (10) TMI 58 - AT - Service Tax

Merger date impacts Cenvat Credit entitlement for manufacturers.

JK PAPER LTD Versus C.C.E. & S.T. -SURAT-I

JK PAPER LTD Versus C.C.E. & S.T. -SURAT-I - TMI Issues:- Denial of Cenvat Credit on GTA Service due to merger of entitiesAnalysis:The appeal was filed against the denial of Cenvat Credit on GTA Service by M/s. JK PAPER LTD post their merger with JK Environ-tech LTD (JKETL). The Chartered Accountant for the appellant argued that the merger of the entities was effective from 01.04.2013 as per the scheme submitted to the Hon'ble High Court. Referring to the decision in the case of ITC HOTELS LTD, it was contended that post-merger, all services received by JK Environ-tech LTD (JKETL) should be considered as received by the appellant themselves, who were entitled to avail Cenvat Credit as manufacturers of paper.The Authorized representative for the respondent relied on the impugned order. The Tribunal observed that the merger of M/s. JK PAPER LTD and JK Environ-tech LTD (JKETL) w.e.f 01.04.2013 was undisputed. Citing the decision in the case of ITC HOTELS LTD, the Tribunal highlighted that the date of amalgamation as presented in the scheme should be considered as the 'transfer date', irrespective of the later approval by the Court. The Tribunal emphasized that post-merger, services provided to the appellant should be deemed as provided to themselves, absolving any service tax liability.The Tribunal concluded that post-merger, JK Environ-tech LTD (JKETL) and the appellants are to be treated as one entity from 01.04.2013. As the appellants were manufacturers of excisable goods entitled to Cenvat Credit on GTA services, services received by JK Environ-tech LTD (JKETL) after the merger date should be deemed as received by the appellants. Consequently, the impugned order was set aside, and the appeal was allowed.