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TMI Blog2017 (9) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... t the appellants in terms of Memorandum of Arrangement dated 14/04/1999 among all the group companies, incurred various expenses relating to sales, marketing and general business promotion of all the group companies and the said expense was shared in proportion to the turnover, with the said group companies. The Revenue entertained a view that the appellants were in fact involved in providing Business Auxiliary Service in such arrangement. In other words, it is contended that the appellants procured various services which promoted the business of group companies, being individual legal entities there is a relationship of service provider and service recipient between the appellant and the group companies. The Original Authority on conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctly done in the impugned order. 4. We have heard both the sides and perused the appeal records. The facts of the case are that the appellant alongwith group companies involved in similar business had an arrangement in writing to procure services which will help the appellant and group companies in sales, marketing and promotion of their business. Such services are provided by third parties and the payment is made by the appellant. Thereafter, the appellant shared the expenditure with other group companies on proportionate basis. The Original Authority held that the appellant as well as the other group companies are independent legal entities. Merely because the group companies have shared the expenditure incurred by the appellant on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture for common facilities cannot be treated as service by one to another in such arrangement. The Tribunal in Old World Hospitality Limited Vs. CST, New Delhi - 2017 - VIL - 97 - CESTAT - DEL - ST held as below :- "8. It is clear from the terms of the agreement that IHC and the appellants have undertaken the business activities together and shared the revenue in a fixed proportion. The obligation of each party has been listed out. The dealings are more like co-venture agreement with joint purpose and shared income. This is also emphasized by forming of committee for tariff and quality in which both the contracting parties are representatives. The appellants are providing working capital, staff and management skills to run the facilities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sharing arrangement. The Appellant has entered into contract with each of the Participating Group Companies to enable such cost sharing in respect of the specified activities to minimize the overall operational cost. The Agreements specify the appointment of the Appellant as a Trustee or Manager to obtain, hold and manage the resources required for jointly carrying out the activities. The Agreements also prescribe that the Participating Group Companies would share the cost of obtaining and employing resources in relation to the specified activities. Further, the Appellant shall be entitled for a fixed remuneration of Rs. One Crore per annum for acting as a manager. The Appellant has agreed to act as such Manager on the basis that the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X
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