M. Veeraiyan, Member (T)

1. Heard both sides on the petition seeking stay of the order of Commissioner (A) by which order of original authority rejection the refund claim of the applicants has been set aside. Considering the nature of the dispute, the question of granting stay as claimed by the department does not arise and the appeal itself is taken for final hearing.

2. This is an appeal filed by the department against the order of the Commissioner (A) No. 166/2010 dated 15.09.2020, by which the order of the original authority passed in denovo proceedings rejecting the refund claim of Rs. 8,40,752/- pertaining to the period March, 06 to February, 2007, was set aside.

3. The relevant dates and events deserve to be recorded in detail. They are as follows:

a) M/s. Indian Oil Corporation Ltd. (hereinafter referred as IOCL), the present Respondent and M/s. IBP Co. Ltd. (hereinafter IBP) were holding company and subsidiary company respectively.

b) A proposal was mooted for merging IBP, the subsidiary company with IOCL, the holding company and the Ministry of Petroleum issued a merger order dated 30.04.07, making the merger retrospectively effective from 01.04.2004. In the mean while, during the period from March, 2006 to February, 2007, IBP paid service tax for storage and warehouse charges rendered by IOCL.

c) Consequent to merger order dated 30.04.07, IOCL on 04.05.2007 surrendered the registration certificate issued to IBP under Central Excise Law. IOCL also claimed refund of service tax amounting to Rs. 8,40,752/- on 29.05.2007, being the service tax paid by IBP, during the period from March, 2006 to February, 2007.

d) The claim was rejected by the original authority against which the Assessee filed appeal before the Commissioner (A) and the Commissioner (A) vide his order dated 24.09.09 remanded the matter for fresh consideration by the original authority with certain directions.

e) In the denovo order dated 06.04.10 passed by the original authority, the claim has been rejected and against which the party filed an appeal before the Commissioner (A) and the Commissioner (A) vide the impugned order dated 15.09.10, allowed the appeal of the party.

f) Hence the department is in appeal.

4.1 The Ld. SDR reiterating the grounds of appeal submits that during the relevant period both IBP and IOCL were existing as two different legal entities. The service tax was validly paid and therefore the question of granting refund does not arise. He also submits that service tax has been paid by IBP, and therefore the question of claim of refund by IOCL does not arise especially, after surrendering of registration certificate of IBP on 30.04.07. The submits that through the amalgamation was effective from 01.04.2004 as per the order of the Petroleum Ministry, the same came into effect only from 02.05.2007, when the Registrar of Companies granted approval of the same.

4.2 He relies on the following decisions in support of his submissions.

1) Technocraft Industries (I) Ltd. v. CCE, Mumbai : 2000 (120) ELT 106 (Tri.)

2) Palani Andavar Cotton & Synthetic Spinners Ltd. v. CCE : 2010 (252) ELT 127 (Tri.- Chen.)

3) CCE, Chandigarh v. Nahar Industrial Enterprises Ltd. 2009 (236) ELT 206 (Tri.-Del.)

5. Ld. Advocate for the Respondents strongly supports the order of the Commissioner (A). Since the merger, as per the decision of the Ministry was effective from 01.04.2004, the same should be given effect in respect of tax liability. The registration of this arrangement with the Registrar of Companies at a later date does not affect the status of IBP after the merger, which was w.e.f. 01.04.04.

6. I have carefully considered the submissions from both sides and perused the records. The amalgamation order issued by the Ministry of Petroleum is undisputedly dated 30.04.07. However, the said order specified 01.04.04 as the effective date of merger. Apparently, the process of amalgamation took considerable time and the same has been effected only by order dated 30.04.07. Such retrospective approval does pose certain practical difficulties. The effect of the order is that from 01.04.04, IBP ceased to exist as a separate company. That being the case, the transaction between IBP and IOCL during the interim period could not be treated as between a service provider and service recipient. As the order of the Ministry of Petroleum clearly mentioned 01.04.04 as the effective date of amalgamation, notwithstanding the date of approval given by the Registrar of Companies being 02.05.07, the specific date indicating the date of amalgamation as 01.04.04 should be accepted.

7. The case of CCE, Chandigarh v. Nahar Industrial Enterprises Ltd. (cited supra) relied by the Ld. SDR does not support his case. In the said decision, it has been held that when the Honble High Court has given effective date which was different from the date of approval granted by the Honble High Court, the former date should prevail. In the present case, the Ministrys order clearly specifies the effective date, which is 01.04.04. Therefore, the original authoritys order rejecting the refund claim holing that the effective date for amalgamation is from 2.5.07, cannot be approved. In view of the above, the Appellate Commissioners order appears legal and proper. The decision of the Tribunal in the case of Technocraft Industries (I) Ltd.(cited supra) is also preferring to accept what is referred to as effective date which was different from the approval date. The other submission that the certificate has been surrendered on 04.05.2007 is also not relevant as on the said date both IOCL and IBP were present only as IOCL. IOCL has taken over the assets and liabilities of erstwhile IBP w.e.f. 01.04.04 in view of the amalgamation. Undisputedly the surrender formalities were also undertaken by IOCL. Therefore, IOCL is stepping into the shoes of erstwhile IBP, have claimed the refund.

8. In view of the above, I hold that there is no valid ground adduced to interfere with the order of the Commissioner (A).

9. The appeal by the department is rejected. The stay petition is also disposed of.

(Order pronounced and dictated in the open Court)