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2011 (3) TMI 187 - AT - Service TaxRefund claim - The merger, as per the decision of the Ministry was effective from 01.04.2004, the same should be given effect in respect of tax liability. The registration of this arrangement with the Registrar of Companies at a later date does not affect the status of IBP after the merger, which was w.e.f. 01.04.04 - The Ministry s order clearly specifies the effective date, which is 01.04.04. Therefore, the original authority s order rejecting the refund claim holing that the effective date for amalgamation is from 2.5.07 - The Appellate Commissioner s order appears legal and proper - The decision of the Tribunal in the case of Technocraft Industries (I) Ltd. is also preferring to accept what is referred to as effective date which was different from the approval date - The other submission that the certificate has been surrendered on 04.05.2007 is also not relevant as on the said date both IOCL and IBP were present only as IOCL - IOCL has taken over the assets and liabilities of erstwhile IBP w.e.f. 01.04.04 in view of the amalgamation - The surrender formalities were also undertaken by IOCL- Therefore, IOCL is stepping into the shoes of erstwhile IBP, have claimed the refund - The appeal by the department is rejected - The stay petition is also disposed of.
Issues:
Appeal against rejection of refund claim by Commissioner (A) - Validity of refund claim post-amalgamation - Effective date of amalgamation - Interpretation of Ministry's order specifying effective date - Applicability of service tax paid by subsidiary post-amalgamation - Legal status of entities pre and post-amalgamation. Analysis: The appeal before the Appellate Tribunal CESTAT, Chennai involved a dispute regarding the refund claim of Rs. 8,40,752/- by the department, which was rejected by the original authority but set aside by the Commissioner (A). The case revolved around the amalgamation of a holding company (IOCL) and its subsidiary (IBP), with the Ministry of Petroleum issuing a retrospective merger order effective from 01.04.2004. The department contended that since service tax was validly paid by IBP during the period in question, the refund claim by IOCL post-amalgamation was not tenable. The department argued that the amalgamation only became effective from 02.05.2007, as approved by the Registrar of Companies, and relied on legal precedents to support its position. The respondents, on the other hand, supported the Commissioner (A)'s decision, emphasizing that the Ministry's order specified the effective date of amalgamation as 01.04.2004, which should govern the tax liability post-amalgamation. The respondents argued that the registration with the Registrar of Companies at a later date did not alter the status of IBP after the merger. The Appellate Tribunal, after considering the submissions from both sides and examining the records, noted that the Ministry's order clearly stated 01.04.2004 as the effective date of amalgamation, despite the formal approval on 02.05.2007. The Tribunal found that from 01.04.2004, IBP ceased to exist as a separate entity, and transactions with IOCL during the interim period could not be treated as between separate entities. The Tribunal distinguished the case cited by the department, emphasizing that the effective date specified by the Ministry's order should prevail. It concluded that the original authority's rejection of the refund claim based on the approval date by the Registrar of Companies was incorrect. The Tribunal held that IOCL, post-amalgamation, effectively succeeded IBP and was entitled to claim the refund. Therefore, the Tribunal upheld the Commissioner (A)'s order, finding no valid grounds to interfere with it. Consequently, the department's appeal was rejected, and the stay petition was disposed of, affirming the Commissioner (A)'s decision in favor of the respondents.
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