2004 (8) TMI 710

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....e India Ltd. another company hereinafter referred to as BWIL for short are independent subsidiary of Glaxo Wellcome Pvt. Ltd. (now known as Glaxo SmithKline Service Pvt. Ltd.) UK, pending a formal merge of BWIL & appellants, to be carried out fully. BWIL is also engaged in the manufacture & sale of wide range of drugs & pharmaceutical products. The joint operation costs incurred by the appellant for BWIL are allocated & reimbursed as per an agreement. 2. Pursuant to verification of notes of accounts (Section 18(12)(b) of the Balance Sheet for 1998 & 1999) it was found, by the officers, that the appellants has recovered certain amounts towards 'Staff Costs' & other expenses & shared services from BWIL. This was considered to, after due enq....

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....ee or professional charges for the same & being compensated in actuals will not render them "management consultant" would ipso facto exempt them from the visit of Service Tax, is not accepted, following Kerala Colour Labs Association v. Union of India 2003 (156) ELT 17 (Ker.) relied upon by the Ld. DR. It is the rendering of service that is taxed & not belonging to a profession, trade or calling. The taxable event would arise if the 'Service is rendered'. The considerations to defer the 'Service rendered' import full or at profit is not relevant as taxable event will determine the Tax & not the compensation thereof. Parasmal Bam v. CCE 2002 (146) ELT 717 (Trib.- Delhi). (b) Examining the costs deferred by BWIL it is found that 'other expe....

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....s provided by the consultants, and not the Executory Services provided by a contractor. The staff cost as incurred & reimbursed for 8 teams in marketing exclusively for BWIL, as ably presented by the Ld. DR, would be conducting Executory Functions & not Advisory Functions. The definition of Management Consultant reads as under- "(65) 'management consultant' means any person who is engaged in providing any service, either directly or indirectly, in connection with the management of any organisation in any manner and includes any person who renders any advise, consultancy or technical assistance, relating to conceptualising, devising, development, modification, rectification or upgradation of any working system of any organization;" When ....