2015 (3) TMI 180 - AT - Service Tax

Waiver of pre deposit - CENVAT Credit - Management Consultancy Service - Held that - There is no proposal to classify the service received as 'Business Support Service' at all. Secondly, the Commissioner's decision that the service received can be considered as 'Business Auxiliary Service', in our opinion, prima facie, is not sustainable. Whether it can be correctly classified under 'Management Consultancy Service' or not is an issue which, in our opinion, does not require any consideration when we are considering the issue whether Cenvat credit is admissible or not. If we consider, it amounts to reclassification of service in the hands of receiver who has taken the credit. The assessment of tax payable on service received and the Cenvat credit to be paid is not the responsibility of the service receiver but the service provider. If we take a decision that service receiver should have examined the correctness of the classification, it amounts to reassessment which is also not permissible in law. Therefore, prima facie, we find that the impugned order is not sustainable. Accordingly, requirement of pre-deposit of the adjudged dues is waived and stay against recovery is granted during pendency of the appeals. - Stay granted.

Summary

Issues:
Classification of services received as 'Business Auxiliary Service' or 'Management Consultancy Service'; Admissibility of Cenvat credit; Validity of the impugned Order-in-Appeal.

Analysis:
The case involved a dispute over the classification of services provided by M/s Hampshire Hotels & Resorts to the appellant, who owned "The Dream Hotel." The Revenue contended that the services should be classified as 'Business Auxiliary Service' instead of 'Management Consultancy Service,' affecting the appellant's entitlement to Cenvat credit. The Commissioner upheld the classification under 'Business Auxiliary Service' in the Order-in-Appeal.

Upon review, the Tribunal found that the Commissioner's decision lacked sustainability. The Tribunal noted that the issue of whether the services could be classified as 'Business Support Service' was not proposed. Furthermore, the Tribunal opined that reclassifying the services under 'Management Consultancy Service' was not necessary when determining the admissibility of Cenvat credit. The Tribunal emphasized that the responsibility for assessing tax and Cenvat credit lay with the service provider, not the receiver. Requiring the service receiver to reassess the classification would be impermissible under the law.

Consequently, the Tribunal held that the impugned order was not sustainable. It waived the pre-deposit of the adjudged dues and granted a stay against recovery during the pendency of the appeals. The Tribunal's decision focused on the procedural aspects of tax assessment and credit entitlement, emphasizing the distinction between the roles of service providers and receivers in such matters.