TaxTMI 
TaxTMI 
2006 (2) TMI 25
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.... law. The appellants manufactured Cotton yarn, Polyester yarn and blended yarn of cotton which are excisable. The Corporate Office of the appellant is in Coimbatore. They have Spinning unit in Kerala and Andhra Pradesh states. Further, they have doubling units in Kerala, Tamilnadu and Andhra Pradesh. They have dyeing units in Karnataka, Tamilnadu and Andhra Pradesh. A weaving unit is in Tamilnadu. The above units of the appellants, M/s. Precot Mills Ltd., Coimbatore are independent units and are separate profit centers. The Corporate Office of the Company in order to evaluate the performance of each unit, raise inter unit debit notes to account for the cost of goods and services supplied by one unit to the other. The accounts of the various....
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....f the Finance Act, 1994, taxable service means, any service provided to a client by a Management. Consultant in connection with the management of any organization in any manner. Hence, it is necessary that the client relationship should be established between the service provider and the service receiver before proposing levy of service tax. In the appellants case, client relationship is not established since they belong to same Company, namely Precot Mills Ltd. (ii) One cannot be a service provider as well as client when the service receiver and the service provider are belong to the same Company. (iii) The inter unit debit notes raised by the appellants on their own Dyeing Unit got eliminated at the time of consolidation of the accounts....
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....red from service receiver in India as same person cannot be both client and agent, and amendment to Rule 2 of Service .Tax Rules, 1994 by insertion of clause (iv) for payment of tax by service receiver in India had only prospective effect - Section 68 of Finance Act, 1994. (iii) Saturday Club Ltd. Vs. Asst. Commissioner, Service Tax Cell, Calcutta, 2005 (180) ELT 437 (Cal.) wherein it was held that principally there should be existence of two sides/ entities for having transaction as against consideration. In a members club, there is no question of two sides. Members and club both are same entity. One may be called as principal when the other may be called as agent, therefore, such transaction in between themselves cannot be recorded as in....
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....the following facts:- (i) The service provider and the service receiver belong to the same Corporate entity known as Precot Mills Ltd. with a single certificate of incorporation. (ii) Share holding is for the Corporate body and balance sheet is prepared for the whole entity and not unit-wise. (iii) For service tax to be leviable, the provider and the client of Management Consultancy Services need to be two separate legal entity as construed from Section 65 (72) of the Act which is not the situation in the instant case. (iv) It is usual practice that for internal accounting purposes and apportioning cost inter unit book adjustment are made in a corporate body. The Commissioner has not accepted the contention of the appellants and held th....