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TMI Blog2025 (1) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... uests. Such bills clearly indicated the Service Tax thereon. Sometimes, instead of making direct payment to ITH for the sake of convenience, the guests paid the bill of ITH to ITC Sonar (the present appellant). The appellant collected such charges from the guests on behalf of ITH and the same amount was immediately paid to ITH without retaining any amount. For such services, no consideration was paid by International Travel House Limited to the appellant. The Department took the view that appellant was providing rent-a-cab services by hiring the vehicles from other agencies. On 18-10-2011, a Show Cause Notice was issued invoking the extended period provisions. The appellants, in response, submitted that they were only taking the payment from the guests and then forwarding it to ITH and not retaining any amount and at the same time, the appellant was not being paid any consideration by ITH. Thus, they stated that no service was being provided by them, neither to the guests nor to International Travel House Limited. 2. The appellants in the course of their business provided accommodation to the employees of other Division and such cost was debited to the account of that Division. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, he submits that there has been no consideration which has been paid by ITH to ITC Sonar for gathering the amount from guests and paying to ITH. Admittedly the amount realized from the guest has been fully passed on to the ITH and the Learner Counsel takes us through the documentary evidence placed before this Tribunal to show that whatever has been realized from the guest has been fully given back to ITH. In the Books of Account of ITC Sonar, there would be contra entry, one entry for having received the amount from the guest and another debit entry showing that the same as being paid back to ITH. The appellant has not retained any part of the amount received from the guest and has passed on the amount received fully to ITH. Admittedly Department has not brought in any evidence that ITH has paid any commission or any other consideration amount to ITC Sonar. He submits that in fact the quantification itself is erroneous since the entire consideration received from the guest has been taken as the consideration received by ITC Sonar whereas the whole amount was passed on to ITH. The demand, if any, could have been made only if any consideration has been given by ITH to ITC which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice Tax was payable on the services of Rent-A-Cab services and associate enterprises transactions, both of them would be eligible for Cenvat Credit by the appellant ITC Sonar. Therefore, this is a matter of revenue neutrality, since they would be eligible to take the Cenvat Credit for the service tax, if any payable. On these counts, he submits that the confirmed demand for the extended period is required to be set aside on account of limitation also. 10. The Learned AR reiterates the findings of the Adjudicating Authority. He submits that the appellant being a star hotel was providing rent-a-cab service which was being advertised in their website clearly stating that this is one of the services being provided by the hotel. He submits that the demand has been quantified based on the receipt of rent-a-cab service amount by the appellant from their guests. Therefore, he justifies the confirmed demand. 11. In respect of the demand on account of associate enterprises, he submits that Circular No. 334/1/2008-TRU dated 29/02/2008 has clarified that when there is a transaction between the associate enterprises, it is to be viewed as transaction between two independent enterprises. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to a conclusion that the appellant is providing the rent-a-cab service without any corroborative evidence. We also find force in the point made by the appellant that the consideration is being taken as the entire amount received from the guests whereas the books of account very clearly show that the amount collected so has been paid back to ITH. So far as the adjudicating authority's finding that appellant has not provided the details of Service Tax paid by ITH, we find that this is not required to be proved by the appellant. ITH is already registered as a Service Tax provider and they are responsible for the invoices raised by them wherein service tax charged is being shown. It is for the jurisdictional authorities to take up the matter and proceed against ITH, in case they are collecting the Service Tax under these bills and not remitting the same to the Department. In view of these factual details and documentary evidence shown to us, we find that the confirmed demand of Rs 67,38,390 under the rent-a-cab service is not legally sustainable. Accordingly, we set aside the impugned order to this extent and allow the appeal. 16. Coming to the issue of Debit Notes raised by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the records of the case carefully. While dropping the proceedings against the appellants, the Asst. Commissioner in his order dated 27-6-2002 has taken into consideration the following facts :- (i) The service provider and the service receiver belong to the same Corporate entity known as Precot Mills Ltd. with a single certificate of incorporation. (ii) Share holding is for the Corporate body and balance sheet is prepared for the whole entity and not unit-wise. (iii) For service tax to be leviable, the provider and the client of Management Consultancy Services need to be two separate legal entity as construed from Section 65(72) of the Act which is not the situation in the instant case. (iv) It is usual practice that for internal accounting purposes and apportioning cost inter unit book adjustment are made in a corporate body. The Commissioner has not accepted the contention of the appellants and held that the internal accounting system of the appellants will not have any bearing on the payment of service tax. In our view, for the leviability of service tax, there should be a service providers and service receiver. As held by the Original authority (Asst. Commissioner) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in the case of Indian Oil Corporation Ltd Vs. Commissioner of Central Exercise Patna, 2007 (8) STR 527 (Tri.-Calcutta), has held as under:- 2. Shri Mukesh Kumar, Authorized Representative of the Appellants states that the Department is seeking to levy Service Tax in respect of activities which have been performed by one part of the Appellant Company for another part. He states that no service has been rendered to any other person outside the Company. Hence it is his contention that no Service Tax is payable when no service has been rendered by the Appellants to anyone else. In this connection, he relies on the ratio of the decision in the Precot Mills Ltd. v. CCE, Tirupathi reported in 2006 (2) S.T.R. 495 (Tri- Bang.). 4. After hearing both sides and perusal of the case records and the cited case law, we find that since the appellants have not rendered any service to any other person, their case is squarely covered by the ratio of the cited decision in the case of Precot Mills Ltd. (Supra). Hence, following the ratio of the said decision, we hold that the demand made against the appellants not sustainable in law. Accordingly, we set aside the impugned order and allow the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase laws are squarely applicable to the factual matrix of the present case. Accordingly, we hold that the confirmed demand of Rs. 28, 54, 978/- is not legally sustainable. We set aside the impugned order to this extent and allow the appeal. 22. Coming to the arguments rendered by the appellant in respect of time bar, we find that the appellant was registered with the Service Tax department and has been discharging the service tax payments and also they were filing their ST3 returns. Quantification of demand towards rent-a-cab services as well as debit notes raised on associate enterprises have been obtained by the Revenue from the books of accounts maintained by the appellant. We do not see that the appellant has indulged in any suppression in these matters. Further, the appellant could be carrying bonafide belief that no Service Tax is required to be paid on the rent-a-cab service being actually rendered by ITH. In respect of the debit notes raised on other divisions, the appellant should have carried bona fide belief that since they are all part of the Divisions of the same company, there is no need to pay any Service Tax on such activities. 23. We find that the Department has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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