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M/s. Madhya Pradesh Consultancy Orgnisation Ltd. Versus CCE, Bhopal

2017 (4) TMI 954 - CESTAT NEW DELHI

Management Consultancy Services - appellants carried out various research, development project, training programmes, acting as nodal agency on behalf of different Ministries of the Central Government and Madhya Pradesh Government. Revenue entertained a view that the appellants are liable to service tax in respect of these activities carried out on behalf of the various government Ministries - case of appellant is that the appellants did provide service, which can be categorized under the various .....

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sion of the Tribunal in Apitco Ltd. [2010 (7) TMI 176 - CESTAT, BANGALORE], is squarely applicable to the facts of the present case where there was no payment, by any government to the assessee, of any amount in excess of what is called "grant-in-aid". Thus any service provider-client relationship between the assessee and the governments is ruled out. The appellants are not liable to service tax in respect of these activities carried out, by using the grant-in-aid given by the various Ministries .....

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round that the address of branch office or head office was mentioned instead of appellant’s address cannot be the ground for denial of otherwise eligible cenvat credit. - Appeal allowed - decided in favor of appellant. - Service Tax Appeals Nos. 342/2012 and Appeal No. ST/50304/2014 - Final Orders Nos. 52927-52928/2017 - Dated:- 19-4-2017 - Hon ble Shri S.K. Mohanty, Member (Judicial) And Hon ble Shri B. Ravichandran, Member (Technical) Ms.Shreya Dahiya, Advocate for the appellant Shri Amres .....

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nationalized banks. They are engaged in providing consultancy services to private sector and are registered with the Service Tax Department to discharge service tax under the category of Management, Consultancy Services . The appellants also carried out various research, development project, training programmes, acting as nodal agency on behalf of different Ministries of the Central Government and Madhya Pradesh Government. They received grants-in-aid in respect of these activities from the conc .....

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₹ 82,25,013/- and ₹ 95,65,343/- under the category of Management Consultancy Services . A further demand of ₹ 2,34,646/- was also confirmed by denying cum-tax benefit to the appellant. ₹ 22,500/- and ₹ 3,049/- were confirmed after denial of cenvat credit availed in respect of certain incomplete documents and catering services respectively. 3. Ld. Counsel appearing for the appellants submitted that the issue was originally decided by the Commissioner vide order date .....

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Ld. Counsel submitted that the findings of the lower authority is completely erroneous and the attempt to distinguish the decision of the Tribunal in Apitco Ltd. (supra) is without merit. 5. The appellant s organizational set-up, objective and the nature of activities carried out, are identical to that of Apitco Ltd. In fact, the Articles of Association of both the organizations are identically worded and are substantially having the same objects of functioning. Similar to Apitco Ltd., the appel .....

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ship in such arrangement. Reliance was also placed on the Board s Circular dated 9.7.2001, which clarified that the grants received by public funded research institutions from the Government, for conducting research - project work will not attract service tax. Further, reliance was placed on the decision of the Tribunal in Mineral Exploration Corporation Ltd. -2015 (38) STR 421 (Tribunal- Mumbai). The Tribunal held that grants received are towards expenses involved in various activities and henc .....

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and the head office and that by itself cannot be the reason for denial of credit. 7. Ld.AR submitted that receipt of consideration by the appellant in the name of grants-in-aid by itself will not make the service as not taxable. Admittedly, the appellants did provide service, which can be categorized under the various taxable categories like Consulting Engineer, Convention Service, Management Consultants and Market Research Agency . The consideration is received in the form of grants-in-aid and .....

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ific direction to examine the decision of the Tribunal in M/s.Apitco Ltd. (supra) with the facts of the present case and to arrive at a fresh decision. However, we note that the Original Authority distinguished the decision of the Tribunal in M/s. Apitco Ltd. (supra) in the following manner:- I find that the facts in the present case are dissimilar to the ones of APITCO Ltd. V.CCE, Hyderabad. The instant proceedings do not deal with the issues of relationship between the assessee and government .....

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bservation is devoid of merit. As noted already, the organizational structure and the memorandum of objectives are almost identical for both Apitco and the appellants. The activities carried out and the consideration received in the form of grants-in-aid are similar for both the parties.We also note that the decision of the Tribunal in Apitco Ltd. has been upheld by the Hon ble Apex Court by dismissing the civil appeal filed by the Revenue vide Order dated 2.5.2011. When the civil appeal is dism .....

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al in B. Rama Rao & Company - 2011 (23) STR 49 (Tribunal-B), wherein it was held that the SLP by the Government filed before the Supreme Court was dismissed and the said dismissal being summary in nature without recording any reasons and as such the same does not lay down any law and is not a binding precedent. Here, we note that the Original Authority failed to appreciate the difference between a civil appeal and an SLP filed before the Hon ble Supreme Court. The civil appeal is a statutory .....

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by the Hon ble Supreme Court) in Apitco Ltd., we find that the impugned orders are devoid of merit in sofar as they relate to tax liability of the appellant with reference to various works carried out by them for which consideration was paid by the Government through grants-in-aid. For easy reference, we reproduce the relevant portion of the decision of the Tribunal in Apitco Ltd. :- 6. We have given consideration to the submissions. It is not in dispute that the assessee-company had implemented .....

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nments. Therefore, we hold that, in the implementation of the Governmental schemes, the assessee as implementing agency did not render any taxable service to the government. The department seems to be considering the Governments to be clients of APITCO. The question now is whether there was service provider-client relationship between the assessee and the governments. Here, again the nature of the amounts paid by the governments to the assessee is decisive. A client must not only pay the expense .....

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ring the assessee within the ambit of scientific or technical consultancy as clearly held by this Bench in the case of Administrative Staff College of India (supra). An organization rendering scientific or technical consultancy service under Section 65(105)(za) of the Finance Act, 1994 must be a science or technology institution. The assessee-company has not been shown to be such an institution. Moreover, the revenue has failed to show that any scientific or technical advice or consultancy or as .....

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College of India (supra), this Bench held that, as the research activities of the assessee (Administrative Staff College) were related to social science, they would not be within the ambit of scientific or technical consultancy and hence no service tax could be levied under that category, which view is squarely applicable to the facts of the present case. The view taken by the Tribunal in the above case stood affirmed by the Apex Court in the above case within the dismissal of the department s .....

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igned to the appellant are in the nature of various welfare activities carried out by the Government in public interest. These are counseling, re-training and redeployment of rationalized employees of Central Public Sector Enterprises, and Entrepreneurship Development Programme with reference to production of specific products, skill development training programme through Science and Technology etc. The appellants were to submit full records of the expenditure with reference to each project to t .....

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ground that instead of paying service tax on the gross amount, the appellant paid service tax by treating the gross amount as cum-tax-receipt inclusive of tax, the appellants submitted that the invoices raised are inclusive of taxes. In terms of Section 67(2) of Finance Act, 1994, they are entitled for calculating the tax by treating the amount as inclusive of tax. We note that the Original Authority did not give any detailed finding for demanding such short levy. He simply reproduced a case law .....

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