SKF Technologies (I) Pvt. Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
In the matter aforementioned CESTAT allowed appeal by deciding the various grounds on merit and modified the impugned order accordingly.
Appellant and SKF India are both subsidiaries of AB SKF Sweden. Appellant & SKF India have agreed to pool & combine their respective manpower & other resources for the purpose of achieving maximum synergetic benefits. Order-in-Original passed against nine show cause notices pertaining to the period April 2008 to September 2013. The demands have been confirmed on various counts and the amount of demand confirmed against each count.
(1) Credit on Business Support Service — Rs. 1,63,49,705/-: Appellant has entered into an agreement with SKF India and hence SKF India raises an invoice towards sharing of cost along with service tax which show that SKF India and Appellant simply agreed to share some common expenditures. Appellant has not adduced any evidence to prove that they had availed any service in relation to their manufacturing activity. The mere fact that service tax has been paid on the amount transferred from one unit to another does not make any transaction an input service. Service tax has been paid on the amount transferred from one unit to another does not make any transaction an input service. Hence, the Cenvat Credit availed on Business Support Servicef or the period from April 2008 to June 2017, was disallowed. It was argued that if tax was not payable, credit cannot be denied once tax is paid on services given by the supplier and Tax payment accepted at service provider’s end. Revenue supported the impugned order. CESTAT relied upon the decision of Amara Raja Electronics Ltd. v. Commissioner of C. EX., Tirupati – 2016 (43) STR 601 (Tri. – Hyd.) and held that when the department has accepted the tax on the services provided by sister concern to appellants, then they cannot deny credit alleging that no services were rendered. ITAT allowed this issue in favour of appellant.
