Case Law Details
Brief of the Case
In the case of M/s Usha International Ltd. Vs. CST, it was held that In case of amalgamation of companies appointed date as per Amalgamation Scheme is required to be taken as the date of amalgamation and not the date on which entire formalities were completed and the service provided by assessee from the appointed date to Amalgamating Company is to be considered as provided to self, in which case, no service tax liability would arise against them.
Facts of the case
The appellant filed a refund claim of Rs.84,76,586/- on 8.1.2009 seeking refund of service tax paid on royalty paid by the transferee company M/s Usha International Ltd. (UIL) to transferor company M/s Jay Engineering Works Ltd. (JEW) on the basis of the High Court order dated 26.5.2008 approving merger of the erstwhile UIL and M/s Shree Ram Fuel Injections Ltd. (SRFIL) with JEW with effect from 1.4.2007 being appointed the date of said merger. JCW was receiving royalty from UIL for the use of it brand name and paid service tax on royalty so received and sought refund of service tax paid during the period 1.4.2007 to 31.3.2008 on the ground that as a result of merger from 1.4.2007 it became service to self and therefore no service tax was payable but was paid as the order of the High Court approving the merger was received only on 28.5.2008. Vide order-in-original dated 26.8.2009, the primary adjudicating authority sanctioned the refund of Rs.71,74,496/-. However, Revenue filed an appeal against the said order before Commissioner (Appeals). The Commissioner (Appeals) vide order in original dated 8.6.2008 remanded the case to the original adjudicating authority with the direction to UIL to file relevant documents before the primary adjudicating authority in respect of proof of compliance of the direction contained in the order dated 26.5.2008 of the Hon’ble High Court regarding the date of merger of three companies on which the issue of taxability of the payment in respect of royalty was dependent. The primary adjudicating authority in turn held that refund of Rs.71,74,496/- already granted deserved to be rejected and recovered.
The appellant filed appeal before the Commissioner (Appeals) against the said rejection order claiming that the service tax paid during the period 1.3.2007 to 31.8.2008 was paid on royalty received from erstwhile UIL and that as a consequence of merger with effect from 1.4.2007 it amounted to rendition of service to self and therefore no service tax was payable during the said period. It also stated that there was no unjust enrichment as has been certified by the Chartered Accountant and no Cenvat credit was taken of the service tax the refund of which was sought. The Commissioner (Appeals) came to a finding that Registrar of Companies, National Capital Territory of Delhi & Haryana, Ministry of Company Affairs, issued to the appellant its approval for change of name of JEW to Usha International Ltd. from 20.6.2008 and therefore up to that date the rendition of service cannot be termed as service to self and the service tax was correctly payable/paid and so no refund was admissible. Appeal No. ST/58043/2013 is against the said order in appeal. Appeal No. ST/56974/2013 is against order in original dated 16.1.2013 which was issued confirming demand of Rs. 71,74,496/- “erroneously” refunded earlier along with penalties under Sections 77 and 76 of the Finance Act, 1994.
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