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2014 (8) TMI 824 - AT - Service TaxLevy of service tax on services provided to associated companies - book adjustment entries - period from October 2009 to September 2011 - new subsidiary was formed only on 30.3.2011 and is yet to take over the functions - Held that:- When the service recipient itself is not there, the question of book adjustment would not arise. Even for subsequent years also there is no evidence to show that appellant did recover this amount. Moreover the notes reproduced by us hereinabove, would show that what was proposed in ‘Note 5’ was also a proposal to recover expenses and not to recover consideration for services provided. Even assuming that such recoverable cost proposed to be recovered from the subsidiary are for the services rendered, if such amount is not realized and recovered and no book adjustment is carried out, liability for service tax would not arise. Other than a ‘Note’ showing proposal to recover the cost from the subsidiary, there is no corresponding evidence either documentary or otherwise to show that there was either a book adjustment or recovery of cost. There is no evidence to show that the appellants have recovered cost for the services rendered from the subsidiary or the public limited company which has been formed subsequently either documentary or otherwise. When the cost of services is not recovered question of levy of service tax also does not arise. Therefore, the demand on this count cannot be sustained and has to be set aside. In view of the above, the matter is remanded to the original adjudicating authority to verify the worksheet submitted by the appellant regarding payment of service tax on the amounts as and when received by the appellant - Decided in favour of assessee.
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