Whether services rendered by appellant to its sister concern in various areas like procurement of raw materials, undertaking certain job work, permitting use of certain facilities of the appellant company like telephone, reception etc. would amount to rendering "management consultant services"?

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....hether services rendered by appellant to its sister concern in various areas like procurement of raw materials, undertaking certain job work, permitting use of certain facilities of the appellant company like telephone, reception etc. would amount to rendering "management consultant services"? <br>News and Press Release<br>Dated:- 10-10-2008<br><BR>This issue has been addressed by the CESTAT in a ....

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....recent case (reported in 2008 -TMI - 30858 - CESTAT NEW DELHI) In this case: (a) The appellants were engaged in the manufacture of oil field equipment. M/s Varco Sara (India) Pvt. Limited is a sister concern of the appellant with some common Directors and under common management. The appellant has rendered services to the sister concern in various areas like procurement of raw materials, underta....

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....king certain job work, permitting use of certain facilities of the appellant company like telephone, reception etc. (b) The original authority held that the activities undertaken by the appellant would amount to rendering "management consultant services" and accordingly confirmed demand of service tax amounting to Rs. 1,43,564/- relating to the period April 2999 to March 2002 and imposed penalti....

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....es under sections 76 and 77 of the Finance Act, 1944. Commissioner (Appeals) has upheld the order of the original authority. After hearing the arguments, CESTAT held that: No doubt, that the appellant is rendering a variety of services to M/s Varco Sara (India) Pvt. Limited in areas like procurement of raw material, packing of finished goods, documentation etc. in addition to undertaking job wor....

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....k. The activities are in the nature of providing some employees undertaking certain job work, procuring raw materials, sharing certain common facilities and sharing the expenses, etc. procurement of raw material. All these activities, in our considered opinion, will not amount to rendering management consultant service. Therefore, we hold that they cannot be held as rendering the management consul....

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....tant service. (For full text of judgment - visit 2008 -TMI - 30858 - CESTAT NEW DELHI)<BR> News - Press release - PIB....