TaxTMI 
TaxTMI 
2026 (6) TMI 1228
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....ts employees, assets, liabilities, rights were transferred to and vested with the Appellant w.e.f. 01.04.2007. 2.2 The Appellant and M/s. PBIL, being related companies, were required to perform certain common managerial and administrative functions. As a matter of administrative convenience, it was deemed expedient to maintain a common office/business establishment under the aegis of the Appellant and to share the costs of such common expenses. The common services include Club Membership (club or association service), Hospitality, Insurance Premium, Rent, Repair & Maintenance, freight, Telephone, Traveling & Car Hire etc which were provided by third parties appointed by the Appellant, for both the entities. The Appellant did not provide any service to PBIL except cost sharing of the common expenses and coordinating and monitoring the same. 2.3 Accordingly, common expenses relating to M/s. PBIL incurred by the Appellant for the period 2006-07, were recovered by way of raising a debit note. The said fact of sharing of expenses has also been duly disclosed in Clause 30 of Notes to the Balance Sheet and Profit & Loss Account for the FY 2006-07. 2.4 Meanwhile, the department co....
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....s and commerce of M/s. PBIL during the relevant period. 2.10 Being aggrieved by the Order-in-Original, the Appellant filed an appeal before the Commissioner (Appeals) on diverse grounds. 2.11 Without appreciating the submissions made by the Appellant, the Ld. Commissioner (Appeals) confirmed the demand of service tax vide the impugned order dated 13.11.2018. However, the Ld. Commissioner (Appeal) vide the impugned order allowed the benefit of cum-tax to the Appellant and modified the demand to Rs.12,22,589/- along with interest and penalty. 2.12 Being aggrieved by the impugned order dated 13.11.2018, the appellant is before us. 3. The ld. Counsel for the appellant submits that sharing of common expenses between the appellant and M/s PBIL is not taxable under "Business Support Service". The said issue is no more res-integra and has been decided by this Tribunal in favour of the appellant. 3.1 He submits that no service is being provided to M/s. PBIL in the present case. M/s. PBIL is a fully owned subsidiary of the Appellant. The Appellant and PBIL receive various common services/facilities for carrying out their day-to-day business activities. In order to minimise the....
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....se of Reliance ADA Group Pvt. Ltd. Versus Commissioner of S.T., Mumbai-IV [2016 (43) S.T.R. 372 (Tri. - Mumbai)], wherein under similar facts, the demand under BSS was held to be unsustainable on the ground that the amendment in the definition of BSS was carried out w.e.f. 01.05.2011 to include within its ambit operational or administrative assistance in any manner and therefore prior to such amendment the demand was held to be unsustainable as the identical activities under consideration were held to not fall within any activity specified under BSS. 3.3 It is further submitted that it has been consistently held in a catena of judicial precedents that cost sharing arrangements between group companies are outside the ambit of service and thus, no service tax is leviable thereon. In this regard, he relies on the following decisions : (i) M/s. Forum Projects Private Limited Versus Commissioner of Service Tax, Kolkata, 2025 (1) TMI 1262 - CESTAT KOLKATA (ii) M/s. Tata Motors Limited, Jamshedpur Versus Commissioner of Central Excise, Jamshedpur, 2024 (5) TMI 1639 - CESTAT KOLKATA. (iii) M/s Boston Scientific India Pvt Ltd Versus Commissioner of Central Exci....
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....titute charges for providing such services. There is no dispute about the manner in which HCN is received through pipeline from M/s. Reliance Industries Ltd. by GSFC and GACL and then shared in the ratio of 60 : 40 respectively. GSFC and GACL are public sector undertakings, as already mentioned above. Since HCN is to be received through pipeline, it is abundantly clear that in order to save the expenditure, both the parties agreed that there should be a common pipeline. Once HCN is received through the said common pipeline, it comes first to GSFC's premises and from there it is diverted in the ratio of 60 : 40, meaning thereby that GSFC receives 60% of the HCN whereas GACL receives 40% of the supply in accordance with their respective requirement. To enable GACL to receive this HCN through common pipeline, arrangement/agreement was entered into between these two parties. For this purpose, handling facilities were installed in the premises of GSFC. However, fact remains, for which there is no dispute, that for installation of these facilities both the parties had contributed towards the investment. Since the said handling facilities are in the premises of GSFC, incineration also tak....
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....essing." 9.1. The activity undertaken by the appellant is for managing transportation of personnel, importation costs, crèche, education, sports, medical and health, legal services, housekeeping, water supply, timekeeping, HR management, town planning service, rural and community development, audit, quality control services, compressor house, common stationery items, factory maintenance, etc., does not fall under the category of 'business support service' prior to 01.05.2011 as the words "operational assistance for marketing" was replaced as "operational or administrative assistance in any manner". The same view was taken by this Tribunal in the case of Reliance ADA Group Pvt. Ltd. (supra) wherein it was observed as under: - "5.5 It is therefore clear that common services are not 'provided' by the appellant but, only these are only 'procured' by the appellant from the Service Providers. Costs thereof are shared by the recipient Participating Group Companies by making reimbursements to the Appellant. The Appellant merely carries out the agency function of procurement of services for the Participating Group Companies which share the costs and expenses thereon....
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....mpanies in a pre-determined ratio and are subsequently recovered by the Appellant. The amount so recovered by the Appellant are only towards the actual amounts payable by the Appellant to the third party vendors or Service providers. The Appellant has not recovered any amount over and above the actual expenses incurred by it in facilitating the provision of common services to its Participating Group Companies. The Appellant has made the payment to the third party vendors or service provider for procurement of specified services on behalf of the Participating Group Companies. The services so procured by the Appellant has been used or availed by the Participating Group Companies. Having used the services Participating Group Companies in law would be liable to make the payment directly for such services to third party vendors or service providers, however, for convenience such payment has been routed through the Appellant under the pass through mechanism. The Participating Group Companies have authorized the Appellant to procure the services. Such authorization has been executed in the form of contractual agreement between the Appellant and Participating Group Companies. Participating....
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....s CA Certificate submitted by the Appellant detailing the Cenvat credit otherwise available to the Appellant is not even noticed in the impugned Order. The Appellant had duly submitted all the invoices under the cover of letter dated 7- 52015, and a copy of the CA Certificate along with the details of Cenvat credit otherwise available during the relevant period has been produced before us. 5.20 The impugned Order erroneously invokes extended period for demanding Service Tax for the financial years 2006-07 to 2007-08. It is seen that even if the activities carried out by the Appellant are subjected to Service tax, the Participating Group Companies who were duly registered with the Service tax authorities during the relevant period and were discharging Service tax on their activities, would be entitled to avail the Cenvat credit thereof. Copies of the Service Tax Return (ST-3) filed by the Participating Group Companies namely Reliance Communication & Infrastructure Limited, Reliance Energy Limited, Reliance Capital Limited, Reliance Communications Limited and Reliance Telecom Limited for the financial years 2006-07 and 2007-08 were submitted by the appellant in the adjudicat....