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TMI Blog2025 (4) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, wherein the Ld. Commissioner has confirmed the service tax demand of Rs. 2,24,20,000/- along with interest and imposed equal amount of tax as penalty. 2. M/s. Hindustan Aeronautics Ltd, Barrackpore Division, ( herein after referred as the Appellant) submits that transfer of inter division unit and IFD charges are paid by one division to another division of the Appellant for using the infrastructure facilities of the latter unit. The said charges are notional and no actual consideration is paid by one division to another. These charges are accounted as 'charges received' in the supplying division and as 'charges paid' in the receiving division, which nullifies each other on consolidation of divisional Balance sheets at Corporate Office l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, the Appellant submits that they have maintained separate records for availing Cenvat credit for provision of taxable services. The Appellant submits that they have satisfied the condition of maintenance of separate records as required under Rule 6 of CCR. Therefore, Appellant is not required to pay any amount at rate of 5% on exempted goods as provided under Rule 6(3)(i) of CCR, 2004. The appellant submits that the figure of 2774.16 lakh of clearance of exempted goods in August 2009 as alleged in the order/SCN is without any basis and erroneous. As per the audited Balance Sheet & Profit and Loss Account of the Appellant, the figure for the entire financial year 2009-10 is Rs. 248.40 lakhs (Note 22 of audited Balance Sheet & Profit and L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judication orders passed by other adjudicating authorities dropping the demands. We find that the same issue has been decided in favour of the appellant's other Divisions located at other places and the said decisions have been accepted by the department. For the sake of ready reference, the relevant paragraphs from the said adjudication Order Sl.No. BLR-EXCUS-003-COM- 36-37-15-16 dated 31.01.2016 dropping similar demand is reproduced below: - "12.2. Now I take up the issue relating to Service Tax demanded on IFD (Inter Factory Demand) charges. The allegation in the notice is IFD charges are paid by the other units of HAL for use of Infrastructure of Helicopter division and the service is taxable under Supply of Tangible of Goods Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent legal entity from the other units of the assessee who have paid IFD charges for use of Infrastructure. Therefore, I hold that in this case Helicopter division and the other units of the assessee who paid IFD charges for use of Infrastructure are part of same legal entity. Thus, I am inclined to accept the contention of the assessee that the services provided by Helicopter division to other units of HAL amounts to self service and Service Tax is not applicable on the services provided to self. Consequently, I hold that Service Tax demanded on IFD charges received by one division of HAL from another unit of HAL is liable to dropped." Thus, we find that the issue has already been settled and proceedings initiated against the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the same.
5.4. Since, the demands confirmed in the impugned order are not sustained, the question of demanding interest and imposing penalties does not arise.
5.5. We also find that the entire demand is made on the basis of documents shared by the Appellant/ PSU, and therefore, there is no suppression with an intent to evade payment of tax established in this case. Accordingly, we hold that no penalty imposable under section 78 of the Finance Act, 1994 and hence we set aside the same.
6. In view of the discussions above, we set aside the impugned order and allow the appeal filed by the appellant, with consequential relief, if any, as per law.
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