Dr. D.M. Misra and Dr. I.P. Lal, JJ.
For the Appellant : Dr.Samir Chakraborty, Advocate
For the Respondent : Shri Anirudha Roy, Supdt.(A.R.)
JUDGMENT
Per Dr. D.M. Misra.
1. This is an Application seeking waiver of pre-deposit of Service Tax of Rs.1.74 Crores and penalty of Rs.2.00 Crores imposed under Section 78 and penalty of Rs. 5,000/- under Section 77 of the Finance Act, 1994.
2. Dr. Samir Chakraborty, Ld.Sr.Advocate for the Applicant submits that during the relevant period i.e. April, 2005 to March, 2010, the Applicant, namely, M/s. Tata Steel Ltd. (Growth Shop) has renedered services to M/s.Tata Steel Ltd.(Steel Works), under the category of ‘commissioning and installation services’ and ‘maintenance and repair services’. It is his submission that M/s. Tata Steel Ltd.(Growth Shop) had been also rendering services, under the said category, to other service receivers, on which Service Tax has been discharged, a fact not in dispute. He submits that since M/s.Tata Steel Ltd.(Growth Shop) and M/s.Tata Steel Ltd. though two units but are one and the same legal entity, therefore, no Service Tax is payable as services rendered to self cannot be subjected to Service Tax. In support he has referred to the judgement of this Tribunal in the case of M/s.Indian Oil Corporation Ltd. vs. CCE, Patna 2007 (8) S.T.R. 527 (Tri.-Kolkata) and Precot Mills Ltd. vs. Commissioner of Central Excise, Tirupati 2006 (2) S.T.R. 495 (Tri.-Bang.).
3. Per contra, the Ld. A.R. for the Revenue submits that the Applicant M/s.Tata Steel Ltd.(Growth Shop) has been providing such services, on the basis of tenders floated by M/s.Dastur & Co., appointed by M/s.Tata Steel Ltd.(Steel Works), the service receiver. He submits that on qualifying the bid, the work order has been issued by M/s.Tata Steel Ltd.(Steel Works) and there is an agreement between M/s. Tata Steel Ltd.(Steel Works) and M/s. Tata Steel Ltd.(Growth Shop) for rendering such service. It is his submission that unless M/s. Tata Steel Ltd. and M/s.Tata Steel Ltd.(Growth Shop) are separate legal entities, there would not have been any reason for entering into an agreement and also putting an arbitration clause. He submits that these two units are having separate PAN based Service Tax as well as Central Excise Registration number. It is his contention that therefore M/s.Tata Steel Ltd.(Growth Shop) and M/s.Tata Steel Ltd.(Steel Works) be treated as separate legal entity and hence the judgements cited by the Ld.Advocate is not applicable.
4. In his rejoinder Dr.Samir Chakraborty, Ld.Sr.Advocate has categorically submitted that M/s.Tata Steel Ltd.(Growth Shop) is an unit of the M/s.Tata Steel Ltd. (Steel Division) and a trial balance is prepared for measurement of its performance. It is his submission that all income tax compliance has been made from their Head Office at Mumbai, for all the units, spread all over India. The separate trial balance is prepared to assess the profit/loss of each individual unit and their performance. It is his submission that merely taking separate registration under various tax laws, would not make them separate legal entity. In support he has referred to the decision of this Tribunal in their own case reported as Tata Iron & Steel Co.Ltd. vs. CCE, Jamshedpur - 2008 (228) E.L.T. 124(Tri.-Kolkata).
5. Heard both sides and perused the record. The principal issue in the present case involved is that whether M/s. Tata Steel Ltd.(Growth Shop) and M/s. Tata Steel Ltd. are different legal entities or one and the same entity, whereby, the services rendered by M/s. Tata Steel Ltd.(Growth Shop) to M/s.Tata Steel Ltd.(Steel Division) would come under the scope of Service Tax. Prima facie, we find that M/s.Tata Steel Ltd.(Growth Shop) has been appointed to provide services by floating tenders by M/s.Tata Steel Ltd. through M/s.M.N.Dastur & Co.. From the argument of the Ld.Advocate, we find that M/s.Dastur & Co. has only been appointed for the purpose of inviting tenders and selection of bidders. Also, from the submission of the Ld.Advocate we find that M/s.Tata Steel Ltd.(Growth Shop) and M/s.Tata Steel Ltd.(Steel Works) are not separately, incorporated as companies under the Companies Act, 1956. He submits that even though separate PAN based registrations were taken, but the entire liability relating to Income Tax and prescribed Income Tax Returns are filed from their Head Office on behalf of the units against a single PAN number and prima facie, we find that the Applicant and M/s.Tata Steel Ltd. (Steel Works) are not two separate legal entities, but units of Tata Steel divisions. In absence of any contrary judgement placed by the Revenue to the decisions of M/s.Indian Oil Corporation Ltd. and Precot Mills Ltd. (supra), prima facie, we are of the view that Service Tax may not be payable for rendering service by one division to another division of the same legal entity. In the result, the Applicant could able to make out a prima facie case, for total waiver of pre-deposit of dues adjudged. Accordingly all dues adjudged is waived and its recovery stayed during pendency of the Appeal. Stay Petition allowed.
(Pronounced and dictated in the open court.)
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