2015 (11) TMI 621 - AT - Service Tax

Simultaneous availing the benefit of abatement and Cenvat Credit - Benefit of Notification No.2/2004 as amended and 01/2006-ST dt.01.03.2006 - Tour Operator Service - Held that - Appellant should have taken decision about the benefit of notification for claiming abatement. We find that the Appellant had already reversed the CENVAT Credit. The Tribunal in the case of Khyati Tours & Travels Vs CCE Ahmedabad - 2011 (6) TMI 324 - CESTAT AHMEDABAD observed that the benefit denied on the ground of availment of CENVAT Credit alongwith benefit of abatement in respect of rent-a-cab service. It has been observed that reversal of CENVAT Credit amounts to non-availment of credit. Accordingly the benefit of notification for claiming abatement cannot be denied. In the present case the appellant reversed the CENVAT Credit and benefit of abatement cannot be denied. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Availment of CENVAT Credit along with the benefit of abatement under Tour Operator Service.

Analysis:
The Appellate Tribunal CESTAT Ahmedabad considered the issue of the Appellant providing taxable services under the category of Tour Operator Service and availing the benefit of Notification No.2/2004 and 01/2006-ST while paying Service Tax on the taxable value after deducting abatement. The Appellant had availed CENVAT Credit during specific periods and later reversed it. The Adjudicating authority contended that the Appellant should have decided on claiming abatement while availing the CENVAT Credit. However, the Tribunal referred to a previous case where it was observed that the reversal of CENVAT Credit amounts to non-availment of credit, and hence, the benefit of notification for claiming abatement cannot be denied. The Tribunal concluded that since the Appellant had reversed the CENVAT Credit, the benefit of abatement could not be denied in this case.

The Tribunal's decision was based on the interpretation of the law regarding the availment of CENVAT Credit along with the benefit of abatement under the Tour Operator Service category. Citing a previous case, the Tribunal clarified that the reversal of CENVAT Credit signifies non-availment of credit, which does not warrant the denial of the benefit of notification for claiming abatement. By setting aside the impugned order, the Tribunal allowed the appeal filed by the Appellant, emphasizing the importance of the Appellant's action in reversing the CENVAT Credit as a crucial factor in determining the eligibility for the benefit of abatement under the relevant notifications.