By TIOL News Service

MUMBAI, DEC 24, 2012: THE appellant are the logistic division of M/s. Mahindra and Mahindra Limited. They are providing various logistics services to another division - Farm Equipment Sector (FES) Division of Mahindra and Mahindra Ltd.

A show cause notice was issued for demand of service tax for the logistics services provided by the appellant to their FES division for the period 15/12/2007 to March 2010.

The demand of Rs.82,17,904/- was confirmed by the CCE, Nagpur along with interest and various penalties and so the appellant is before the CESTAT.

The appellant submitted that they are one of the divisions of M/s Mahindra and Mahindra Limited and by taking separate service tax registration it cannot be held that both the divisions are separate legal entity; therefore, demand for the period 15/12/2007 to 10/09/2008 is not sustainable.

With respect to the demand for the period 11/09/2008 to March, 2010, it is submitted that since the appellant had become a separate legal entity and they were registered at their Mumbai office who discharged the service tax liability on the service rendered by them at Nagpur, the demand cannot be confirmed and since this fact could not be verified during the course of adjudication the matter may be remanded back for verification from the Range Superintendent of Mumbai.

The Revenue representative reiterated the impugned order and further submitted that as the appellant did not produce any relevant documents at the time of adjudication, pandora's box cannot be opened at this stage as to whether they have paid the service tax or not?

The Bench observed -

"6. Considering the submissions made by the learned Chartered Accountant we find that Mahindra and Mahindra Limited is a legal entity which is having two separate divisions. Merely by taking two separate service tax registrations it cannot be said that both are separate legal entities. Therefore, demand for the period 15/12/2007 to 10/09/2008 is not sustainable.

7. For the remaining period, the matter needs examination by the adjudicating authority after obtaining reports from the Range Superintendent of Mumbai whether the appellant has paid the service tax or not. For this purpose the matter is remanded back to the adjudicating authority to verify whether the appellant has paid the service tax for the period 11/09/2008 to March, 2010 thereafter to pass an appropriate order in accordance with law."

The appeal as well as the stay application was disposed of in the above terms.

Defying logic:

Pandora's Box is an artifact in Greek mythology, taken from the myth of Pandora's creation in Hesiod's Works and Days. The "box" was actually a large jar given to Pandora, which contained all the evils of the world.

(See 2012-TIOL-1919-CESTAT-MUM)