2018 (7) TMI 182 - AT - Service Tax

CENVAT credit - As per the Revenue, the services provided by IHCL were Franchisee Services in which case they were not entitled to avail the entire credit of the Service Tax paid by the Service provider, but the credit should have been availed only to the extent of 20% in terms of Rule 6(3) of Cenvat Credit Rules - Held that - In the case of Piem Hotels Ltd. v. Commissioner of Central Excise, Nasik 2016 (4) TMI 290 - CESTAT MUMBAI , the service recipient from the same service provider i.e. M/s.IHCL was held entitled to 100% credit of the Service Tax by holding that the services provided by M/s.IHCL were nothing but Management Consultancy Services - the appellant is entitled to the full 100% credit of Service Tax paid by M/s. IHCL - decided in favor of appellant. Mandap Keeper Services - appellant explains that they have paid Service Tax on the said services after availing 60% abatement and without availing any Cenvat Credit, they were discharging their full Service Tax liability in respect of such Hall Hire Charges, without the claim of any abatement, for which case they would be entitled to full Cenvat credit of Service Tax paid on various input services - Held that - Inasmuch as the dispute relates to the factual position we deem it fit to set aside the demand on the said count and remand the matter to the original adjudicating authority for verification of the appellant s claim - matter on remand. Demand of around ₹ 16.90 Lakhs is confirmed on Shop and Showcase Rental , Business Center Income and Health Club Services - Held that - Appellant submits that they have already discharged their tax liability on the said services by including the same in the value of Banquet, Internet and Beauty Parlour Services . Inasmuch as the said dispute also relates to factual verification and inasmuch as we have already remanded the matter in respect of other demand we direct the original authority to verify the appellant s claim in respect of the said services also - matter on remand. Demand of ₹ 51,154/- stands confirmed on Vodafone Tower Rental - Held that - according to the appellant this also stands already discharged under the head Banquet . This also needs verification which would be done by the original adjudicating authority - matter on remand. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Availment of Cenvat credit on services provided by M/s. Indian Hotels Company Ltd.
2. Discrepancy in categorization of services provided by the appellant.
3. Disputed demands related to "Shop and Showcase Rental," "Business Center Income," and "Health Club Services."
4. Disputed demand on "Vodafone Tower Rental."
5. Incorrect credit availed on "GTA Services."

Analysis:

Issue 1: Availment of Cenvat credit on services provided by M/s. Indian Hotels Company Ltd.
The appellant was engaged in Hospitality Services and was registered with the Service Tax department. The demand against the appellant was primarily due to availing 100% Cenvat credit based on invoices from M/s. Indian Hotels Company Ltd. (IHCL) for "Management Consultancy Services." The Revenue argued that the services were actually "Franchisee Services," entitling the appellant to only 20% credit as per Rule 6(3) of Cenvat Credit Rules. The Tribunal referred to previous decisions and held that the appellant was entitled to the full 100% credit of Service Tax paid by IHCL, as the services were indeed "Management Consultancy Services."

Issue 2: Discrepancy in categorization of services provided by the appellant
A demand was confirmed against the appellant for "Mandap Keeper Services," which included "Hall Hire Charges." The appellant claimed they were also providing "Hall Hire Services" separately, for which they paid full Service Tax without abatement. The appellant mistakenly included Hall Hire Charges under Mandap Keeper Services in their returns. The Tribunal decided to remand the matter for verification by the original adjudicating authority to confirm the appellant's claim.

Issue 3: Disputed demands related to "Shop and Showcase Rental," "Business Center Income," and "Health Club Services"
Demands were confirmed on these services, but the appellant argued they had already discharged their tax liability by including them in the value of other services. The Tribunal remanded the matter for factual verification by the original authority.

Issue 4: Disputed demand on "Vodafone Tower Rental"
The appellant claimed the demand on Vodafone Tower Rental was already discharged under another category. The Tribunal directed the original adjudicating authority to verify this claim.

Issue 5: Incorrect credit availed on "GTA Services"
Demands were confirmed for availing incorrect credit on GTA Services. The appellant, not fully equipped to challenge the demands, agreed to pay them. The Tribunal confirmed the demands but waived penalties due to the appellant's cooperation.

In conclusion, the Tribunal set aside a major demand, remanded some for verification, confirmed others, and waived penalties. The appeal was disposed of accordingly.