TaxTMI 
TaxTMI 
2024 (6) TMI 1114
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....short), being aggrieved to the respective extents stated in the respective memo of appeals, against the Final Order No. FO/76176/2019 dated August 29, 2019 passed by the Customs, Excise & Service Tax Appellate Tribunal, East Regional Bench, Kolkata (hereinafter referred to as "CESTAT") in Service Tax Appeal No. 372 of 2011; whereby the learned CESTAT while partly allowing the appeal of TSL against the Order-in-Original No. 16/ST/Commissioner/2011 dated May 30, 2011, passed by the Commissioner of Central Excise & Service Tax, Jamshedpur (in short, "the Commissioner"), the said order, as regards demand of service tax on Tata Steel's Growth Shop Unit (in short, "TGS") for the normal period of limitation has been confirmed and the matter has been remanded to the adjudicating authority for working out the liability, if any, for the said normal period. TSL is aggrieved by the confirmation of tax demand for the normal period; whereas the Revenue is aggrieved by the Tribunal holding that the extended period of limitation cannot be invoked in the instant case and, consequently, the demand of tax cannot be raised beyond the normal period. For the sake of convenience, the reference to fact....
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...., assets, liabilities, etc., of TGS is not reflected in a separate profit and loss account and balance sheet but are part of the consolidated figure of Annual Accounts of TSL. TGS does not also file any separate return under the Income Tax Act, 1961.TSL being a limited company is required to prepare its Annual Accounts strictly in accordance with Schedule VI to the Companies Act, 1956. The said Annual Audited Accounts, which are presented to the shareholders, as also to the Government authorities, including, inter alia, Income Tax, Sales Tax and Excise authorities, reflect the consolidated figures of the affairs of the company, as a whole, in respect of all its divisions, including TGS, including the company's Profit and Loss Account. TGS clears the goods from its factory in CKD/SKD form and pays excise duty accordingly. TGS engages sub-contractors to execute the job of erection and installation of the machineries and equipments supplied to its customers and to the Steelworks. Such sub-contractors perform the job in the premises of customers and the Steelworks. The sub-contractors charges and TGS reimburses them the service tax paid on such services. 5. During the material pe....
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....eferred to as "the Act"), and had thereby evaded service tax, which was recoverable from it by invoking the extended period of limitation and had contravened the named provisions of the Act and the Service Tax Rules, 1994 (hereinafter referred to as the "said Rules"). TSL submitted its reply dated March 30, 2011 to the show cause notice and after the personal hearing held, an Order-in-Original dated May 30, 2011 (OIO) was passed by the Commissioner; whereby he confirmed the service tax demand of Rs. 1,74,65,320/- against TSL, along with interest thereon. The Commissioner also imposed penalties of Rs. 2,00,00,000/- and Rs. 5,000/-, under Section 78 and Section 77(2) of the Act respectively, upon TSL. 7. Being aggrieved, the Assessee preferred an appeal against the said OIO before the learned CESTAT, being Service Tax Appeal No. 372 of 2011. However, the appeal filed by TSL was partly allowed, inasmuch as, with regards to demand of service tax on Tata Steel's Growth Shop Unit for the normal period of limitation has been confirmed and the matter has been remanded to the adjudicating authority for working out the liability, if any, for the said normal period. Thus, TSL is aggriev....
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.... despite the fact that M/s. Tata Steels Limited (growth shop) have knowingly suppressed the fact from the department with intent to evade payment of service tax. He further submits that the learned Tribunal has erred in observing that there is no specific allegation of suppression, fraud etc. whereas it has been clearly alleged in the show cause notice that the Assessees were aware that the services provided by them where liable to service tax and by not declaring such fact to the department they have certainly suppressed the facts with intent to evade payment of service tax and such suppression, was only after investigation in this case by the department, was noticed. He contended that the learned tribunal should have appreciated the fact that M/s. Tata Steels Limited was not paying service tax though CENVAT credit on input service was being availed by them and such availment was conscious administrative decision of the company, but with the intent to evade payment of tax, they have suppressed those facts from the department, accordingly the learned CESTAT should not have deleted the penalty. 10. Dr. Sameer Chakraborty, learned Sr. counsel for the Assessee made following ....
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....o oversight and by mistake, did not change the said registration number and accordingly the Service Tax Registration Certificate (ST-2) of TGS continued with the old number containing the PAN of TISCO. As a consequence, thereof, the Service Tax Registration Nos. of TSL and TGS apparently differed. This procedural error has been made a relevant point by the Tribunal to come to the irrational and erroneous conclusion that TGS had rendered services to TSL for a consideration which were exigible under the Act. (e) The fact that TGS and TSL are one and the same entity would be further be evident from: (i) The fact that in the service tax invoices issued by TGS contained the same PAN of both TGS and that of TSL, viz., AAACT2803M. (ii) Payments made by outside parties to TGS for the services rendered by it were by way of account payee cheques/drafts addressed to TSL and not TGS, in spite of the fact that TGS had a separate bank account. As matter of fact, the tribunal has erred in holding TGS and TSL to be different legal entities on the basis of separate excise and service tax registration. (iii) The impugned order being non-reasoned and non-speaking a....
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....nt was for consideration and that in case of orders for executing service, the appellant had subcontracted after making payment for which, the appellant had also taken credit for the Service Tax amount charged. There is also a finding by Ld. Commissioner that the appellant did indeed allot vendor code and ledger to Tata Steel Ltd. by treating the other as its customers on which there is no refutal/rebuttal by the appellant and it is also a part of the record that the services rendered were the results of open bidding/tender where even the appellant amongst others, participated. On being successful, purchase order was placed and the contract came up executed. 6. On considering above discussion by the Ld. Adjudicating Authority, suffice it to say that the appellant has failed to prove that it is the case of 'Self Service' but the Revenue has clearly established that there exists service, there is a service provider, there is also a service recipient; and for which the payment has been made. In the backdrop of the above, therefore, we are of the humble opinion that the decisions relied on by the Ld. Senior Advocate are distinguishable. But however, it is a matter of record th....
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....Rules, 1994, can and are to be treated as two distinct persons and services provided by one unit to another shall be deemed to be taxable supply. In the absence of such specific provision, transaction between two units of the same company cannot be held as 'service' rendered by one unit to the other within the meaning of the Act. Two separate service tax registration of the two units is wholly irrelevant in this regard. It is settled law that one unit of the company does not and cannot render service to another unit of the same company, as this would amount to service rendered to self, which is not a taxable service under the Act: The judgments referred by Mr. Chakroborty on the aforesaid issue are squarely applicable to this case so far as the issue that one unit of the company does not and cannot render service to another unit of the same company, as the same would amount to service rendered to self; thus it is not a taxable service under the Act. 13. At this stage, it is also pertinent to mention here that in case of TSL itself, in respect of the same units, the same Bench of the Tribunal has held earlier that since one unit of the company does not and cannot render servic....
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....6 (S.C.)]; Jayaswals Neco Ltd. v. Commissioner of Central Excise, Nagpur [2006 (195) E.L.T. 142 (S.C.)], etc.] " 14. The law is no more res integra that a company incorporated under the Companies Act, 1956 is a single person/entity in the eye of law and cannot reconstitute itself to several legal entities. Divisions/branches thereof cannot have identity different and distinct from the company. Reference in this regard may be made to Section 3(42) of the General Clauses Act, 1897. Further, Section 65(7) of the Act, as amended, defines an "Assessee" to mean "a person liable to pay the Service Tax and includes his agent". Section 68(1) of the Act requires every "person" providing taxable service to any person to pay service tax at the rate specified in Section 66 in the manner and within the period as prescribed. These provisions make it absolutely clear that an Assessee, except for an individual, has to be a legal person, such as a company or firm, who is liable to pay service tax or who would be providing taxable service. Section 69(1) of the Act requires every "person" liable to pay service tax to get itself registered in the manner prescribed. "Person" herein is also, theref....
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....h factory/premises of manufacturer/service provider does not and cannot render each one of such factory/premises of the manufacturer/service provider a separate legal entity. In fact, there is no such provision in either the Central Excise Act or the Act or in any other law of the land. 16. In the OIO it appears that both TGS and TSL during the personal hearing before him agreed with the Commissioner that in the eye of Central Excise and Service Tax laws TGS and TSL are separate entities having separate service tax and central excise registration and that if a service tax provider avails CENVAT credit of service tax paid on input services there would be liability upon it to make payment of service tax on the output services rendered, is completely misplaced. It is well settled that credit of input service is to be utilized for payment of service tax towards, inter alia, output service. There is, or can be no dispute with this legal position and this is what the representatives of TGS and TSL "agreed" with, during the course of personal hearing. Further, it is also settled legal position that under the Central Excise law there is no requirement of one-to-one correlation betwee....