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TMI Blog2024 (6) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... specific provision, transaction between two units of the same company cannot be held as service rendered by one unit to the other within the meaning of the Act. Two separate service tax registration of the two units is wholly irrelevant in this regard. It is settled law that one unit of the company does not and cannot render service to another unit of the same company, as this would amount to service rendered to self, which is not a taxable service under the Act. It is a principle, settled by the Hon ble Apex Court in CCE, Navi Mumbai Vs Amar Bitumen Allied Products Pvt. Ltd. [ 2006 (8) TMI 187 - SUPREME COURT] , that it is necessary that judicial precedent is followed and in the event a Bench of the same strength of the Tribunal seeking to differ with the decision of another Bench, the matter has to be referred to the President of the Tribunal for reference to a larger bench for deciding the matter. Without assigning any reason or basis, this judicial principle laid down by the Hon ble Apex Court, has also been violated by the Tribunal in passing the impugned order. The law is no more res integra that a company incorporated under the Companies Act, 1956 is a single person/entity i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egional Bench, Kolkata (hereinafter referred to as CESTAT ) in Service Tax Appeal No. 372 of 2011; whereby the learned CESTAT while partly allowing the appeal of TSL against the Order-in-Original No. 16/ST/Commissioner/2011 dated May 30, 2011, passed by the Commissioner of Central Excise Service Tax, Jamshedpur (in short, the Commissioner ), the said order, as regards demand of service tax on Tata Steel s Growth Shop Unit (in short, TGS ) for the normal period of limitation has been confirmed and the matter has been remanded to the adjudicating authority for working out the liability, if any, for the said normal period. TSL is aggrieved by the confirmation of tax demand for the normal period; whereas the Revenue is aggrieved by the Tribunal holding that the extended period of limitation cannot be invoked in the instant case and, consequently, the demand of tax cannot be raised beyond the normal period. For the sake of convenience, the reference to facts is made herein from the memo of appeal of TSL; T.A. No. 09/2020. 3. The brief fact of the case is that M/S Tata Steel Ltd. is a company and is primarily engaged in manufacturing of iron and steel. By virtue of such registration, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prepare its Annual Accounts strictly in accordance with Schedule VI to the Companies Act, 1956. The said Annual Audited Accounts, which are presented to the shareholders, as also to the Government authorities, including, inter alia, Income Tax, Sales Tax and Excise authorities, reflect the consolidated figures of the affairs of the company, as a whole, in respect of all its divisions, including TGS, including the company s Profit and Loss Account. TGS clears the goods from its factory in CKD/SKD form and pays excise duty accordingly. TGS engages sub-contractors to execute the job of erection and installation of the machineries and equipments supplied to its customers and to the Steelworks. Such sub-contractors perform the job in the premises of customers and the Steelworks. The sub-contractors charges and TGS reimburses them the service tax paid on such services. 5. During the material period TGS issued separate invoices for the services rendered and charged service tax with reference to the services rendered by the sub-contractors at customer s premises. However, it did not charge any service tax in respect of the services rendered in the premises of TSL s Steelworks. The speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice and after the personal hearing held, an Order-in-Original dated May 30, 2011 (OIO) was passed by the Commissioner; whereby he confirmed the service tax demand of Rs. 1,74,65,320/- against TSL, along with interest thereon. The Commissioner also imposed penalties of Rs. 2,00,00,000/- and Rs. 5,000/-, under Section 78 and Section 77(2) of the Act respectively, upon TSL. 7. Being aggrieved, the Assessee preferred an appeal against the said OIO before the learned CESTAT, being Service Tax Appeal No. 372 of 2011. However, the appeal filed by TSL was partly allowed, inasmuch as, with regards to demand of service tax on Tata Steel s Growth Shop Unit for the normal period of limitation has been confirmed and the matter has been remanded to the adjudicating authority for working out the liability, if any, for the said normal period. Thus, TSL is aggrieved by the confirmation of tax demand for the normal period; whereas the Revenue is aggrieved by the Tribunal holding that the extended period of limitation cannot be invoked in the instant case. 8. Vide order dated 07.07.2022, this court admitted both these appeals and following questions of law have been formulated: - Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the services provided by them where liable to service tax and by not declaring such fact to the department they have certainly suppressed the facts with intent to evade payment of service tax and such suppression, was only after investigation in this case by the department, was noticed. He contended that the learned tribunal should have appreciated the fact that M/s. Tata Steels Limited was not paying service tax though CENVAT credit on input service was being availed by them and such availment was conscious administrative decision of the company, but with the intent to evade payment of tax, they have suppressed those facts from the department, accordingly the learned CESTAT should not have deleted the penalty. 10. Dr. Sameer Chakraborty, learned Sr. counsel for the Assessee made following submissions: (a) Both in the show cause notice and the OIO passed by the Commissioner, TGS has been referred to as a unit of TSL. Both in the show cause notice ( SCN ), the noticee and in the order the addressee to whom the SCN and the purported order were sent to is M/s Tata Steel Limited (Growth Shop) . It is thus conclusive that TGS is a unit of TSL and hence, since there cannot be any se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered services to TSL for a consideration which were exigible under the Act. (e) The fact that TGS and TSL are one and the same entity would be further be evident from: (i) The fact that in the service tax invoices issued by TGS contained the same PAN of both TGS and that of TSL, viz., AAACT2803M. (ii) Payments made by outside parties to TGS for the services rendered by it were by way of account payee cheques/drafts addressed to TSL and not TGS, in spite of the fact that TGS had a separate bank account. As matter of fact, the tribunal has erred in holding TGS and TSL to be different legal entities on the basis of separate excise and service tax registration. (iii) The impugned order being non-reasoned and non-speaking and hence is violative of principles of natural justice and perverse. In passing the impugned order specific contentions of TSL, based on materials and documents on record and decisions of have either not been referred to or perfunctorily dealt. No reason or basis has been disclosed as to why and how the CESTAT came to the conclusion that these specific contentions of TSL which conclusively evidenced that TGS was at all material point of time and still is an unit of T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er where even the appellant amongst others, participated. On being successful, purchase order was placed and the contract came up executed. 6. On considering above discussion by the Ld. Adjudicating Authority, suffice it to say that the appellant has failed to prove that it is the case of Self Service but the Revenue has clearly established that there exists service, there is a service provider, there is also a service recipient; and for which the payment has been made. In the backdrop of the above, therefore, we are of the humble opinion that the decisions relied on by the Ld. Senior Advocate are distinguishable. But however, it is a matter of record that the Revenue has come to know of the above facts only during the course of checking of records and not from an independent source and therefore, the same cannot be said to have been suppressed with an intention to evade tax and consequently, the demand cannot be raised beyond of the Normal period. We also find that there is no specific allegation of suppression, fraud, etc, to justify invoking larger period of limitation. In the light of the above, therefore, the demand in so far as the normal period of limitation alone can be sus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount to service rendered to self, which is not a taxable service under the Act: The judgments referred by Mr. Chakroborty on the aforesaid issue are squarely applicable to this case so far as the issue that one unit of the company does not and cannot render service to another unit of the same company, as the same would amount to service rendered to self; thus it is not a taxable service under the Act. 13. At this stage, it is also pertinent to mention here that in case of TSL itself, in respect of the same units, the same Bench of the Tribunal has held earlier that since one unit of the company does not and cannot render service to another unit of the same company, as the same would amount to service rendered to self, it is not a taxable service under the Act (Tata Iron Steel Co. Ltd. Vs. Commr. of C. Ex., Jamshedpur 2008 (228) ELT 124 (T-Kol)). None of the aforesaid decisions have been challenged by the Revenue before the higher appellate forums (the Hon ble High Courts or the Hon ble Supreme Court). Thus, the principle laid down in the decision, which have been accepted by the Revenue, has attained finality. It is a principle, settled by the Hon ble Apex Court, that it is necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s his agent . Section 68(1) of the Act requires every person providing taxable service to any person to pay service tax at the rate specified in Section 66 in the manner and within the period as prescribed. These provisions make it absolutely clear that an Assessee, except for an individual, has to be a legal person, such as a company or firm, who is liable to pay service tax or who would be providing taxable service. Section 69(1) of the Act requires every person liable to pay service tax to get itself registered in the manner prescribed. Person herein is also, therefore, a legal entity, which in this case is TSL. A division or branch thereof cannot be a person under this provision. TGS therefore has no independent and different existence or identity, irrespective of the fact that it has to get itself separately registered under the provisions of the Act and the Central Excise Act, 1944. Rule 4(3A) of the said Rules provides that an Assessee providing taxable service from more than one premises or offices has to obtain separate registration of each premise/office. In the absence of a separate definition of Assessee , the definition of Assessee as contained in Section 65(7) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces there would be liability upon it to make payment of service tax on the output services rendered, is completely misplaced. It is well settled that credit of input service is to be utilized for payment of service tax towards, inter alia, output service. There is, or can be no dispute with this legal position and this is what the representatives of TGS and TSL agreed with, during the course of personal hearing. Further, it is also settled legal position that under the Central Excise law there is no requirement of one-to-one correlation between the credits availed in respect of the input and input service and utilization thereof in payment of central excise duty or service tax in respect of dutiable goods manufactured and cleared and/or output service rendered. Hence, TGS had rightly availed the subject CENVAT credits of service tax paid, without there being any concomitant obligation to make payment of service tax on the services rendered to another unit of TSL. Contrary finding of the Tribunal is also erroneous and untenable. 17. At the cost of repetition, we once again reiterate that separate registration of each factory/premises of manufacturer/service provider does not and can ..... 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