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TMI Blog2014 (9) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... r the category of “Support Services of Business or Commerce” and since then discharging their service tax liability on the said services without any protest or dispute. Hence, it sounds illogical to assume that for the period from 1-5-2006 to 9-5-2008 under similar circumstances the services would fall outside the scope of ‘Support Services of Business or Commerce’ when there has been no change in the definition prescribed at Section 65(104c) of the Finance Act, 1994. The argument of the applicant that the services rendered by them to their associate/subsidiary companies on cost sharing basis, prima facie, appears to be not convincing. The issue of revenue neutrality cannot ipso facto be considered as a ground for total waiver of pre-deposit of duty and penalty invariably in all cases without considering other attendant circumstances while disposing an application under Section 35F of the Central Excise Act, 1944. - stay granted partly. X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the said services rendered by the applicant to their associate/subsidiary companies, were on cost sharing basis and accordingly, it could not be said that these services rendered by the applicant to their associated/subsidiary companies had resulted in rendering taxable service under Section 65(105)(zzzq) of the Finance Act, 1994 Further, he has submitted that in view of the Board's clarification laid down in the Circular No. 120(a)/2/2010-S.T., dated 16-4-2010, the service provided by the Applicant to its associates/subsidiary companies on sharing of expenses basis does not result into rendering of taxable service under Section 105(zzzq) of the Finance Act, 1994. He has further submitted that all these associate/subsidiary companies were part and parcel of the applicants few years back and were recently incorporated as separate legal entities under the Company Law and hence, the services rendered to their associate/subsidiary companies could not be considered as service rendered to the clients. Further, he has submitted that all the facts were within the knowledge of the Department being communicated in 2007 by one of their associate company to the department, henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid services to the associated/subsidiary companies, this fact was never brought to the notice of the jurisdictional Service Tax Authorities. He has also submitted that the letter written by one of their associate company, viz. M/s. H.V. Axles Ltd., Jamshedpur, to the Superintendent, DGCEI, Jamshedpur, in 2007, cannot be construed that the applicant had informed the Department about the services rendered by them to all their Associates/Subsidiaries. The ld. A.R. submitted that there is an element of suppression in the present case as has been observed by the adjudicating authority at Para 2.11.2 of the order impugned; wherein he found that initially the applicant had stated to the Department that the considerations for the services were received through book transfer, but later on, it was discovered by the Department that the same were received through cheques. The contention of the A.R. is that at para 2.11.3 of the order impugned, the ld. Adjudicating Authority has recorded that the applicants were availing the CENVAT credit of duty paid input services received by them in relation to providing the said output services to their associate/subsidiary companies, which itself indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clause, the expression "infrastructural support services" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security;] 10. Section 65(105)(zzzq) reads as : (105) "taxable service" means any [service provided or to be provided], - .............................. (zzzq) to any person, by any other person, in relation to support services of business or commerce, in any manner; 11. The ld. Advocate made an attempt to demonstrate that most of the services mentioned in the Annexure to the said agreements and rendered by the Applicant, do not strictly fall within the arena of business activity of the associate/subsidiary companies and consequently the definition of "Support Services of Business or Commerce" had not been satisfied for the disputed i.e. from 1-5-2006 to 9-5-2008. Prima facie, we do not find force in the said argument, mainly for two reasons. Firstly, an apparent analysis of the conditions of the Agreement and the list of services annexed thereto, vis-a-vis the definition of 'Support Services of Business or Commerce' as was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proper infrastructure facilities, which on the contrary, were available with the Applicant. 12. Further we are agree with the submissions of the ld. A.R. that the issue of revenue neutrality cannot ipso facto be considered as a ground for total waiver of pre-deposit of duty and penalty invariably in all cases without considering other attendant circumstances while disposing an application under Section 35F of the Central Excise Act, 1944. Further, we find that the judgements cited by the ld. Advocate to support his arguments for complete waiver on the ground of revenue neutrality are under circumstances different from the present one and hence not applicable. In the case of Reliance Industries (cited supra), the applicants were required to pay service tax as per reverse mechanism principle as the services were received from the overseas supplier who did not have an Office in India; and they were eligible to take credit of the same as such services were their input service. In Vidarbha Iron & Steel Co. Ltd.'s case (cited supra), their Lordships of Bombay High Court observed that the service tax amount payable by the Appellant would be available as refund to their customer who ..... X X X X Extracts X X X X X X X X Extracts X X X X
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