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November 2011

(2011) 23 STR 625 (Tri-Chennai) Commissioner Central Excise, Trichy v. IOC Ltd.

By Puloma Dalal, Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
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Case of amalgamation — The amalgamating company has paid service tax on the services rendered by the amalgamated company — During the period from the date of making an application till the date of order of amalgamation — Amalgamated Company claimed refund for the same — Held, such claim of refund valid.

Facts
In the given case, an amalgamation involving IOCL (holding company) and IBP (subsidiary company) took place as per order of the Petroleum Ministry dated 30-4-2007 with retrospective effect from 1-4-2004. IOCL claimed refund of service tax which IBP had paid in respect of storage and warehouse charges rendered by IOCL during 1-4-2004 to 30-4- 2007 considering that during the said period services were rendered to oneself in terms of amalgamation with retrospective effect. The rejected claim was allowed by the Commissioner (Appeals).

Held
IBP ceased to exist as a separate legal entity w.e.f. 1-4-2004 even though the order was dated 30-4-2007. The transaction between IOCL and IBP could not be treated as one between a service provider and service recipient. IOCL was held entitled to refund of service tax paid by IBP.

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