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TMI Blog2011 (9) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... For Appellant: Shri Amresh Jain, DR For Respondent: Shri Anil Sood, Adv. Per: Archana Wadhwa: Being aggrieved with the order passed by the Commissioner (Appeals), Revenue has filed the present appeal. 2. We have heard Shri Amresh Jain, learned DR appearing for the Revenue and Shri Anil Sood, Advocate appearing for the respondents. 3. As per facts on record, M/s ITC Hotels Ltd. and M/s Ansal Hotels Ltd. were subsiding companies of ITC Ltd. while holding company was also running a few hotels of its own M/s ITC Hotels Ltd. were paying service tax under the category of 'management consultant services' being provided by them to M/s ITC Ltd. and M/s Ansal Hotels Ltd. During the period April, 2004 to September, 2004. Amalgamation proceedings in respect of the three were going on before the Hon'ble Delhi High Court and Hon'ble Kolkata High Court and vide their respective orders, the Hon'ble High Courts allowed the amalgamation of the two companies with the parent company, ITC Ltd. with effect from 1.4.2004 i.e. the appointed date as per Amalgamation Scheme duly approved by the Hon'ble High Courts. As such, according to the respondents, M/s ITC Hotels Ltd. and M/s Ansal Hote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the Hon'ble Apex Court in the matter of M/s Marshall Sons Co (India) Ltd. vs. Income Tax Officers - 1997 (223) ITR 0809 SC that the date provided in the 'Scheme of Amalgamation' is the effective date. The ratio of the judgment quoted above squarely covers the instant case and in view of the principle laid down by the Hon'ble Apex Court I hold that the effective date of amalgamation was 01.4.2004 provided in the 'Scheme of Amalgamation' and assessment of the service tax payable has to be done treating the individual companies as the single legal entity emerged as a consequence of the amalgamation and not separate entities after the said amalgamation. I also find sufficient force in the plea of the appellants that the service tax is not payable if the service has been provided to oneself treating all the companies after amalgamation i.e. w.e.f. 01.04.2004 as one single legal entity or person. I rely on judgments of the Hon'ble Tribunal in the case of Precot Mills Ltd. vs. C.C.E., Tirupati - 2006-TIOL-818-CESTAT-BANG. And Kwality Zipper Ltd. vs. C.C.E., Kanpur - 2002 (145) ELT 296 (Tri-Del.) in this regard. However, I find that the refund of service tax claimed by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided prior to the said scheme, when the respondents, were considered as a separate entities from the service receiver would be liable to service tax which stands correctly paid. He has also drawn our attention to clause 8 of the scheme of amalgamation according to which the employees of transferor company i.e. ITC Hotels Ltd. shall become the employees of the transferee company. As such, he submits that the identity of the service provider and the service receiver remained intact till the effective date which is 23.3.2005. He has also drawn our attention to clause 7 of the scheme of amalgamation which is a saving clause in respect of concluded transaction and submits that any transaction or proceedings already conducted by the transferor company on or before the effective date shall not be affected by the scheme of amalgamation. It is also the contention of the learned DR that the incidence of tax under the Finance Act, 1994 i.e. providing management consultant services has occurred before the effective date of amalgamation. Relying upon the Hon'ble Supreme Court decision in the case of Wallace Flour Mills Co. Ltd. vs. Collector of Central Excise - 1989 (44) ELT 598 (SC), he su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in the case of Technocraft Industries (I) Ltd. vs. C.C.E., Mumbai III - 2000 (120) ELT 106 (Tribunal) which is also being relied upon by the Revenue in the present case and observed that" The decision of the Tribunal in the case of Technocraft Industries (I) Ltd. cited (supra) is also preferring to accept what is referred to as the effective date which was different from the approval date". As such, the learned Advocate appearing for the respondents prays for rejecting the Revenue's appeal. 8. We have considered the submissions made by both sides. There is no denial to the fact that in terms of the Hon'ble High Court of Delhi and Kolkata's order for amalgamation, the appointed date is 1.4.2004. The period involved in the present appeal for claiming refund of service tax is from 1.4.2004 onward till September, 2004. 9. The sole dispute required to be decided in the present appeal is as to whether the appointed date as approved by the Hon'ble High Court i.e. 1.4.2004 is required to be taken as the date of amalgamation of ITC Hotels Ltd. and Ansal Hotels Ltd. with ITC Ltd. or the date on which the entire formalities were completed and the application was filed with the Registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order sanctioning the scheme. We are, therefore, of the opinion that the notices issued by the Income Tax Officer (impugned in the writ petition) were not warranted in law. The business carried on by the transferor company (subsidiary company) should be deemed to have been carried on for and on behalf of the transferee company. This is the necessary and the logical consequence of the Court sanctioning the scheme of amalgamation as presented to it. The order of the Court, sanctioning the scheme, the filing of the certified copies of the orders of the Court before the Registrar of Companies, the allotment of shares etc. may have all taken place subsequent to the date of amalgamation/transfer, yet the date of amalgamation in the circumstances of this case would be January 1, 1982. This is also the ratio of the decision of the Privy Council in Raghubar Dayal v. Bank of Upper India Ltd. AIR 1919 PC 9." As is seen from the above, the Hon'ble Apex Court has observed that it is the date of amalgamation as presented in the scheme which has to be taken as the 'transfer date', inasmuch as the Court's approval may come much later. Further, it is seen from the highlighted portion of the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veness of contacts and deeds under clause 6 above, shall not effect any transaction or the proceeding already concluded by the transferor companies on or before the effective date and shall be deemed to have been done and executed on behalf of the Transferee Company." By referring to the above clause, the contention of the learned DR is that any transaction or proceeding conducted by the transferor company on or before the effective date will not be affected by the scheme of amalgamation. However, we find that such clause stands incorrectly interpreted by the learned DR. A reading of the above clause is reflective of the fact that the action of the transferor company on or before the effective date shall be deemed to have been done and executed on behalf of the transferee company. As such, it is clear that the said clause supports the respondent's stand that any business conducted by the respondents is to be held as having been conducted on behalf of the transferee company. As such, the service tax provided to the ITC Ltd. and Ansal Hotels Ltd. have to be considered as having been provided on behalf of the transferee company viz. ITC. Ltd., in which case, no service tax liability ..... X X X X Extracts X X X X X X X X Extracts X X X X
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