9911796707
TMI Blog2025 (1) TMI 1262X X X X Extracts X X X X X X X X Extracts X X X X ..... ILIZERS & CHEMICALS LTD. & ANOTHER VERSUS COMMISSIONER OF CENTRAL EXCISE [2016 (12) TMI 103 - SUPREME COURT], wherein, it has been held that demand of Service Tax on cost sharing is not sustainable - the demand confirmed in the impugned order under the category of 'Business Support Service' is not sustainable. Demand of service tax on the differential value of Profit & Loss Account and ST-3 returns - HELD THAT:- The ld. adjudicating authority has not given any finding regarding the liability of service tax on the differential value. It is the settled position of law that demand of Service Tax cannot be confirmed merely on the ground that there is a difference in the value of Profit & Loss Account and ST-3 returns. This issue is covered by the decision of Tribunal, Kolkata in the case of M/S BALAJEE MACHINERY VERSUS COMMISSIONER OF CGST & EXCISE, PATNA II [2022 (8) TMI 704 - CESTAT KOLKATA] where it was held that 'Since the records have been duly audited, the demand cannot be raised for the same period on account of change in the opinion. Further, we find that the Appellant had duly submitted the VAT Returns which have been recorded by the Ld. Commissioner in the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial value between P&L and ST-3 21,600 432 22,032 4 Maintenance Charges On the differential value between P&L and ST-3 15,570 311 15,881 Total 6124848 183373 6308221 5 CENVAT Credit - Ineligible credit input service is not used for providing output service for the period 2009-10 13,645 409 14,054 6 CENVAT Credit - Credit documents not produced for the period 2007-08 3,44,768 10,340 3,55,108 Total 3,58,413 10,749 3,69,162 3. Regarding the demand of Service Tax amounting to Rs.62,20,170/- on cost sharing among the group Companies under the category of 'Business Support Service', the appellant submits that by an agreement dated 01.04.2008, they have incurred expenditure on behalf of the group companies and such expenditure/cost is shared among the group Companies at the agreed ratio; the appellant states to have collected such amount and recorded the same in its statutory records, including in the Profit & Loss Account under the heading "Establishment uses charge". The appellant states that such amount is not collected against provision of any service rendered, but the share of cost incurred by the appellant. 3.1. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding suppression, wilful misstatement or fraud and therefore, invocation of the larger period is not warranted. In support of their claim, the appellant relied on the decision by Tribunal, Kolkata in the case of Balajee Machinery v. Commissioner of C.G.S.T. & Excise, Patna-II [2022 (66) G.S.T.L. 440 (Tri. - Kol.)]. As the entire demand is barred by limitation, the appellant contends that the demand confirmed on this count is not sustainable. 6. Thus, the appellant prayed for setting aside the demands and allowing their appeal. 7. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. 8. Heard both sides and perused the appeal records. 9. Regarding the demand of Service Tax of Rs.62,20,170/- on cost sharing among the group Companies under the category of 'Business Support Service', we observe that the appellant incurred expenditure on behalf of the group companies and such expenditure has been shared among the group Companies at the ratio agreed in the agreement dated 01-04-2008. We observe that there is no service element involved in this case. Thus, we find that in these circumstances, the demand of service tax under the categ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed to share the expenditure. The payment which is made by GACL to GSFC is the share of GACL which is payable to GSFC. By no stretch of imagination, it can be treated as common 'service' provided by GSFC to GACL for which it is charging GACL." 9.1. A similar issue was also dealt with by the Tribunal at Ahmedabad in the case of Hazira Lng Pvt. Ltd. v. Commissioner of Service Tax, Ahmedabad [Final Order No. A/11349/2022 dated 02.11.2022 in Service Tax Appeal No. 596 of 2011 - CESTAT, Ahmedabad], wherein it was observed as under: - "4.5 However, since the activities under taken under the cost sharing agreement do not amount to provision of Service in terms of the decision of Hon'ble Apex Court in case of Gujarat State Fertilizers & Chemicals Ltd. (supra), the demand of Service Tax on the activities under taken under the cost sharing agreement cannot be sustained." 9.2. Thus, by relying on the decisions cited above, we hold that the demand confirmed in the impugned order under the category of 'Business Support Service' is not sustainable and accordingly, we set aside the same. 10. Regarding the demand of service tax of Rs.88,051/-, we observe that these demands have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount and ST-3 returns is not sustainable and accordingly. we set aside the same. 11. Regarding the demand of Rs.3,69,162/- confirmed in the impugned order on account of ineligible CENVAT Credit, we find that the issue was raised on scrutiny of ST-3 return for the year 2007-08. It is alleged that the appellant have taken CENVAT credit amounting to Rs.3,55,108.00, but failed to produce the copies of tax paying documents, as required under Rule 9(1)(e) of the said Credit Rules. We find that the Show Cause notice covering the period 2007-08 has been issued on 30.01.2012, by invoking the extended period of limitation. We observe that there is no allegation of suppression, wilful misstatement or fraud in the impugned notice. In the impugned order also, the ld. adjudicating authority has not given any finding regarding suppression of facts or wilful misstatement for invocation of the larger period of limitation. Thus, we find that the demand confirmed by invoking the extended period of limitation is not sustainable. 11.1. As the entire demand is barred by limitation, we hold that the demand confirmed on this count is not sustainable. In these circumstances, we hold that the demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
