Custom, Excise & Service Tax Tribunal
M/S Sara Services & Engineers Pvt. ... vs Cce, Meerut on 16 September, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
R.K. PURAM, W.B. NO.2, PRINCIPAL BENCH
NEW DELHI, COURT NO.I
Service Tax Appeal No. 85 of 2006
[Arising out of Order-in-Appeal No. 247/CE/MRT.I/2005 dated 06.12.2005 passed by the Commissioner (Appeals) Customs & Central Excise, Meerut]
Date of Hearing/ decision: 16.09.2008
For approval and signature:
Hon'ble Mr. Justice S.N. Jha, President
Honble Mr. M. Veeraiyan, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982.
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
M/s Sara Services & Engineers Pvt. Limited Appellant
Vs.
CCE, Meerut Respondent
Appearance:
Mr. P.R. Mullick, Advocate for the Appellant
Mr. L.B. Yadav, Departmental Representative (DR) for the Respondent
CORAM: Mr. Justice S.N. Jha, President
Mr. M. Veeraiyan, Member (Technical)
O R D E R
Per M. Veeraiyan:
This is an appeal against the order of the Commissioner No. 247/CE/MRT.I/2005 dated 06.12.2005.
2. Heard both sides.
3. The relevant facts, in brief, are as under:-
(a) The appellants are engaged in the manufacture of oil field equipment. M/s Varco Sara (India) Pvt. Limited is a sister concern of the appellant with some common Directors and under common management. The appellant has rendered services to the sister concern in various areas like procurement of raw materials, undertaking certain job work, permitting use of certain facilities of the appellant company like telephone, reception etc.
(b) The original authority held that the activities undertaken by the appellant would amount to rendering management consultant services and accordingly confirmed demand of service tax amounting to Rs. 1,43,564/- relating to the period April 2999 to March 2002 and imposed penalties under sections 76 and 77 of the Finance Act, 1944. Commissioner (Appeals) has upheld the order of the original authority.
3. Learned Advocate for the appellant submits that the appellant and M/s Varco Sara (India) Pvt. Limited being sister concerns with some common Directors, the management expertise is equally sharable and available to both the companies. The bills and vouchers based on which service tax was confirmed relate to prorata salary of the employees of the appellant company who have done work for the sister concern, the charges for job work done for the sister concern, cost of ammonia printing and plotting, reimbursement of charges for use of the telephone by the sister concern, share of travelling expenses involved in procurement of the raw material etc. He submits that none of these charges collected relates to service that can be considered as that of management consultant services.
3.1 He also submits that for the period relating to 1995 to 1998, a show cause notice dated 16.12.1998 was issued treating M/s Varco Sara (India) Pvt. Limited as a dummy unit and seeking to demand excise duty and confirmed by the original authority and demand has subsequently been set aside by the Commissioner (Appeals). Now, by a show cause notice dated 30.6.2004/01.07.2004, service tax relating to the period April 1999 to March 2002 has been demanded and confirmed. The facts narrated in the show cause notice are substantially the same as in the previous show cause notice dated 16.09.98. Under these circumstances, the Department is not entitled to invoke the extended period of time limit.
4.1 Learned DR submits that the appellant has not filed the service tax returns and the demand relates to the period prior to 10.09.2004 and, during the relevant period, for invoking extended time limit there was no stipulations that there should be mis-declaration, suppression of facts, fraud, collusion.
4.2 He also submits that the term Management Consultant Service is wide enough and covers any service rendered directly or indirectly in connection with the management of any organization in any manner. Therefore, he seeks upholding the order of the Commissioner (Appeals).
5. We have carefully considered the submissions and perused the records. No doubt, that the appellant is rendering a variety of services to M/s Varco Sara (India) Pvt. Limited in areas like procurement of raw material, packing of finished goods, documentation etc. in addition to undertaking job work. The activities are in the nature of providing some employees undertaking certain job work, procuring raw materials, sharing certain common facilities and sharing the expenses, etc. procurement of raw material. All these activities, in our considered opinion, will not amount to rendering management consultant service. Therefore, we hold that they cannot be held as rendering the management consultant service. The order of the Commissioner (Appeals) cannot be upheld.
6. As we are allowing the appeal on merits, we do not go into the time bar aspect. The appeal is disposed of.
7. Accordingly, the order is set aside and the appeal is allowed with consequential relief.
[Dictated and pronounced in the open Court on 16.09.2008] (Justice S.N. Jha) President [M. Veeraiyan] Member [Technical] [Pant]