Tata Sons Ltd. Vs Commissioner of Service Tax-I (CESTAT Mumbai)
Summary: The appeals arose from Order-in-Original No. 60/STC-I/SKS/15-16 dated 30.09.2015 of the Commissioner of Service Tax-I, Mumbai, against which M/s. Tata Sons Ltd. and the Revenue filed Service Tax Appeal Nos. 85009 and 85206 of 2016 respectively. The dispute concerned CENVAT credit availed on input services during 2008-09 to 2012-13 in the context of Tata Sons’ activities as a Core Investment Company, its taxable brand-promotion service and income from investments.
The adjudicating authority had treated several income streams, including profit on sale of investments, miscellaneous receipts and guarantee commission, as relevant to the proportionate reversal mechanism under Rule 6 of the CENVAT Credit Rules, 2004. It confirmed CENVAT credit recovery of Rs. 36,42,20,169/-, comprising Rs. 34,37,05,962/- relating to common input services and Rs. 2,05,14,207/- relating to 21 services treated as inadmissible, besides interest and an equal penalty.
Tata Sons contended that it was a Core Investment Company and did not trade in securities, but managed investments in group companies in accordance with its investment objectives. It submitted that the amendment to the definition of exempted service introducing the clarification that trading was included could not retrospectively convert investment activity into trading. It also disputed the nexus finding concerning common input services, relied on its detailed submissions and invoices, challenged the invocation of the extended period, and pointed out computational errors and credits already reversed.
