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of <h1>Service tax input credits allowed between company divisions without one-to-one correlation requirement for commissioning services</h1> <h3>M/s Tata Steel Limited Versus Commissioner of Central Excise & Service Tax, Jamshedpur</h3> CESTAT Kolkata allowed the appeal in a service tax case involving commissioning installation and maintenance services for April 2005 to March 2010. The ... Non-payment of service tax - commissioning & installation service - maintenance or repair service - period April, 1, 2005 to March, 31, 2010 - HELD THAT:- In the appellant’s own case, this Tribunal on identical case M/S. TATA STEEL LTD. VERSUS COMMR. OF CENTRAL EXCISE & SERVICE TAX, JAMSHEDPUR [2019 (10) TMI 588 - CESTAT KOLKATA], has observed 'the demand cannot be raised beyond of the Normal period.' The said order was challenged before the Hon’ble Jharkhand High Court and the Hon’ble High Court in COMMISSIONER OF CENTRAL G.S.T & CENTRAL EXCISE, JAMSHEDPUR VERSUS M/S TATA STEEL LTD. AND TATA STEEL LTD. (GROWTH SHOP) , GAMHARIA SARIAKELA KHARSAWAN VERSUS COMMISSIONER, CENTRAL EXCISE AND SERVICE TAX, JAMSHEDPUR [2024 (6) TMI 1114 - JHARKHAND HIGH COURT] has set aside the order of this Tribunal following the decision of the Hon’ble Apex Court in the case of CCE., NAVI MUMBAI VERSUS AMAR BITUMEN & ALLIED PRODUCTS PVT. LTD. [2006 (8) TMI 187 - SUPREME COURT], wherein it has been held that the issue is no more res-integra that a Company incorporated under the Companies Act, 1956 is a single person/entity in the eyes of law and cannot re-constitute itself to several legal entities. Divisions/Branches cannot have identity different and distinct from the Company. Therefore, the findings of this Tribunal demanding service tax was set aside. Therefore, following the decision of the Hon’ble High Court of Jharkhand, it is held that TGS & TSL are the same identity and it is well settled that the credit of input is to be utilized for payment of service tax towards output services. There is or can be no dispute with this legal position and this is what the representatives of TGS and TSL, 'agreed with. Further, it is also settled legal position that under the Central Excise law there is no requirement of one-to-one correlation between the credits availed in respect of the input and input service and utilization thereof in payment of central excise duty or service tax in respect of dutiable goods manufactured and cleared and/or output service rendered. Hence, TGS has rightly availed the subject cenvat credits of service tax paid, without there being any concomitant obligation to make payment of service tax on the services rendered to another unit of TSL. The impugned order is set aside - appeal allowed. Issues Involved:Appeal against service tax demand and penalty imposition.Analysis:1. The appellant, engaged in manufacturing of iron and steel, appealed against the demand for service tax and penalty. The case involved rendering services by one manufacturing unit to another within the same division.2. The Tribunal observed that the appellant failed to prove the case of 'Self Service' and confirmed the existence of service provider, recipient, and payment made for services rendered. The demand for service tax was sustained for the normal period only.3. The High Court set aside the Tribunal's order, emphasizing that a company is a single entity in the eyes of the law, and divisions cannot have distinct identities. The Court highlighted the utilization of input credit for service tax payment and rejected the Department's appeal.4. Following the High Court's decision, the Tribunal held that the appellant and the service provider were the same entity, allowing the utilization of input credit for service tax payment without the obligation to pay tax on services rendered within the company.5. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.This detailed analysis covers the legal judgment comprehensively, addressing the issues involved and the Tribunal's decision in light of the High Court's ruling.
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