TaxTMI 
TaxTMI 
2019 (5) TMI 53
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....ellant is a public limited company providing IT enabled services which are taxable under Section 65(105) of the Finance Act, 1994. The BPO Division of M/s Global Vantedge Pvt. Ltd., de-merged from the parent company and merged with the appellant as an ongoing concern w.e.f 01.04.2007, the appointed date. This demerger from the parent company and merger with the appellant was by virtue of the orders of the Hon'ble High Courts of Bombay and Delhi dated 18.01.2008 and 04.03.2008. Between the appointed date and effective date i.e., from 01.04.2007 to 04.04.2008 M/s Global was to carry on the business activities in the normal course of business for and on account of and in trust of the appellant company. All profits and income accruing or arisin....
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.... irregular availment of CENVAT credit and recover the same under Rule 14 of the CCR, 2004 read with Section 73 of the Finance Act, 1994 along with interest under Section 75. It was also proposed to impose penalty on them under Rule 15(4) of CCR, 2004 read with Section 78 of the Finance Act, 1994. 5. After following due process, the Learned Commissioner disallowed the CENVAT credit and ordered its recovery along with interest and imposed an equal amount of penalty under Rule 15(4) of the CCR, 2004 read with Section 78 of the Finance Act, 1994. He further held that the penalty is liable to be reduced to 25% in case the amount as determined is paid along with interest within 30 days the date of communication of the order in terms of the pro....
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....71,025/- pertaining to the input services which were used by Global for the period 01.04.2007 to 31.03.2008 and the rest pertain to the input services for the period 01.04.2007 onwards, which were used by the appellant to render its output services. Therefore, the CENVAT credit taken has been correctly taken. 9. He would further submit that the assessee is entitled to take credit of the input service invoices of the BPO division of Global and draw the attention of the bench to paras 3.1, 3.2 & 3.3 of the merger agreement which read as follows: "3 Transfer and Vesting of the Demerged Undertaking 3.1 Upon the Scheme coming into effect, the Demerged Undertaking of the Demerged Company shall, with effect from the Appointed ....
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....raw the attention of the bench to para 1.1.6.3 of the agreement in which, it is clearly indicated that as on the appointed date all earnest money and/ or deposits including security deposits paid by the demerged company in relation to the BPO division as on the commencement of the appointed date and all other rights, benefits available under any rules, regulations, statutes including direct and indirect taxes laws and particularly Sales Tax benefits, CENVAT benefits, import and export benefits and customs duty benefits of the demerged company in relation to the BPO division shall get transfer to the appellant in this case. This scheme has been approved by the Hon'ble High Court and therefore is binding on the Department. Any CENVAT credit b....
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....that the company will have to transfer entire business and cannot hive off one part of the business and sell it to another company as has been the assertion in the impugned order. In normal course of business, it is often the practice that one may decide to sell one of its businesses to another firm. In such cases, the business which has been sold gets de-merged from the parent company and merges with the buyer company. Rule 10(2) of CCR, 2004 squarely covers such cases also. In this case, we find that para 1.1.6.3 of the merger agreement specifically covers transfer of all assets and liabilities to the new entity including the CENVAT benefits. This agreement has been approved by the Hon'ble High Court and therefore is final unless such agr....