TMI Blog2017 (10) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was approved by the order of Hon'ble High Court dated 19 March, 2010? - Held that: - The transfer of the Cenvat Credit under sub Rule (1) and (2) shall be allowed only if the stock of inputs as such or in process, or the capital goods is also transferred along with the factory or business premises to the new site or ownership and the inputs or capital goods on which credit had been availed of are duly accounted for to the satisfaction of the Deputy Commissioner of Central Excise as the case may be the Assistant Commissioner of Central Excise. Further, Rule (3) of Rule 10 indicates that such transfer will be allowed only when input capital goods in respect of which credit was transferred were also transferred to the transferee - Whereas in the present case, the Cenvat Credit in respect of input services was already consumed to a certain extent before 29 March, 2010 - admittedly the dispute arose because of the order of merger dated 1 February, 2008, allowing merger with effect from the retrospective date 01 April, 2006. However, during the material time when Service Tax was discharged by the appellant RSPL, the same was illegally paid and credited to the Government. As such tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials by way of retrieval from the website of foreign companies viz. M/s Reuters, ATPN under proper agreements and was making payments for the same. 3. Subsequently, the Appellant considered it appropriate to separate the Regional General Entertainment Channel Business from the News Business and to continue the business as 24x7 news channels in prominent Indian Regional Languages. Thus, a scheme of demerger was formulated under which the Regional General Entertainment Channels were transferred to Zee Entertainment Enterprises Ltd. (hereafter referred to as ZEEL ). The Appellant and the transferee company (ZEEL) entered into the scheme of arrangement for the above said purpose and the said scheme was submitted before Hon ble High Court of Bombay. The said scheme was approved by the Hon ble Bombay High Court vide its order dated 19.03.2010. The Certified copy of the Order of the Hon ble Bombay High Court was received by the Appellant on 25.03.2010 and the same was submitted to the Registrar of Companies on 29.03.2010. In the said scheme, it was provided that the scheme will be operative from 29.03.2010 but effective from 01.01.2010. Till March 29.03.2010, such outgoing channels w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation and Data Base Access Audit or Retrieval Service', according to findings of the Audit Team. As per definition of the service, Any service provided or to be provided by any other person in relation to Development and Supply of content for use in telecommunication services, Advertising agency service and Online Information and Data Base Access or Retrieval Services. Further, development and supply of content includes development and supply of mobile value-added services, music, movie, movie clips, ring tones, wallpaper, mobile games, data, whether or not aggregated, information, news and animation films. It further appeared to the Revenue that those images, text materials which are assessed by the appellant from the website of service providers like Reauters, ATPN etc, are used by appellant in their rendering of online information and data base access or retrieval service. It further appeared that appellant imported the service from abroad but not paid Service Tax under Reverse Charge Mechanism as provided under Section 66A of the Finance Act. It further appeared that so far the Cenvat Credit is concerned during the period 01 January, 2010 to March 2010, the same is irregu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hannels was not operating any business in respect of such channels. It was the appellant company which was performing all the business relating to and including all those 6/7 channels during that period. Thus, the appellant was correctly taking and utilizing credit during the relevant period. Further, he submitted that there is no bar under the law which prohibits from taking the credit before the effective date of the demerger or the approval of the demerger by the Hon'ble High Court. Even for transferring the credit pursuant to demerger, the appellant is required to first take the Cenvat Credit in respect of input services received during the relevant period. The appellant will be able to transfer credit only once such input services credit is taken by them. Further, the learned counsel refers to sub Rule 2 of Rule 10 of CCR, which reads as follows: If the provider of output service shifts or transfers in business on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the business to a joint venture with the specific provision for transfer of liabilities of such business, then the provider of output service shares be allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order that two entities became one and as such there is no warrant of payment of royalty by the appellant RSPL to the brand owner company and the invoice for such payment becomes infructuous for the purpose of availing that credit. Accordingly, the credit availed was held to be inadmissible. Under such facts, this Tribunal held admittedly the dispute arose because of the order of merger dated 1 February, 2008, allowing merger with effect from the retrospective date 01 April, 2006. However, during the material time when Service Tax was discharged by the appellant RSPL, the same was illegally paid and credited to the Government. As such tax paid on input service was held to be correctly utilized by the appellant in terms of Cenvat Credit Rules, 2004. Further, it was noted that eligibility of Cenvat Credit on merit was not disputed by the Revenue. It was also held that later development that on different proceedings under the provisions of company law cannot make a duty paid service tax availed credit during the material time is improper. It was also observed that there were no to legal entities during the material time where valid and legal and the same does not become infructuous, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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