Case Law Details
Jayaswal Neco Industries Ltd. Vs Commissioner of Customs (CESTAT Delhi)
The Hon’ble CESTAT, New Delhi, in Jayaswal Neco Industries Ltd. vs. Commissioner of Customs, Central Excise and Service Tax – Raipur [Service Tax Appeal No. 50893 of 2015 (dated, October 07, 2020)] held that, the assessee could not be held to be liable for discharging service tax liability of the Demerged Undertakings as it the service recipient and not service provider therefore, the confirmation of demand by the Commissioner is bad in law.
Facts:-
The Jayaswal Neco Industries Ltd. (“Appellant”), a manufacturer of excisable goods, is engaged in providing services of goods transport agency and business auxiliary service. During the relevant period from October 2007 to June, 2009, the Appellant had taken on lease the manufacturing plants of M/s Abhijeet Infrastructure Ltd. (“Abhijeet Ltd.”) and Corporate Ispat Alloys Ltd. (“Corporate Ltd.”). These plants were mentioned in the Central Excise registration of the Appellant. At these manufacturing plants, the Appellant manufactured DRI, Pig Iron and billets, which were sold to Abhijeet Ltd. and Corporate Ltd., who further sold these goods to independent buyers at the same price as they were sister concerns of the Appellant.
The Appellant claims to have shared the profits with Abhijeet Ltd. and Corporate Ltd. by way of fixed discounts and incentives in the form of additional discounts, paid on a monthly basis by way of debit notes issued by the, based on the quantity of goods sold by Abhijeet Ltd. and Corporate Ltd. met a certain sales target mutually agreed upon by the Appellant and the two concerns, which were recorded in the books of account of the Appellant. The Appellant settled the account of Abhijeet Ltd. and Corporate Ltd. after adjusting the aforesaid discounts/incentives.
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