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2019 (5) TMI 1410 - AT - Service TaxInterpretation of statute - Notification No.1/2006-ST. - abatement of service tax - CENVAT Credit - input services - HELD THAT - It is apparent that the appellant can avail Cenvat Credit for all services except those which are used for providing the services specified in Notification No. 1/2006-ST. In the instance case, the appellant have admittedly availed CENVAT credit of Telephone services, Repair and maintenance (telephone lines laundry, air conditioning, etc), Internet caf , contract services (Security services), Technical consultancy service (services used running hotel), Advertisement services, rent a hotel counter service etc. It is apparent that the services Like Telephone services, Repair and maintenance services, Technical consultancy service, contract services, Advertising services or in the nature of common inputs services. The Said services have direct or indirect nexus with all the activities undertaken by the hotel. Also there are no merit in the claim of appellant they have not availed the credit of input services used in provision of mandap keeping services. Appeal dismissed - decided against appellant.
Issues: Interpretation of Notification No.1/2006-ST regarding abatement from taxable value for services provided, availability of CENVAT credit for input services, and denial of benefit under the Notification.
Analysis: 1. The appeal was filed against the demand of service tax, interest, and penalty under Section 76 of the Finance Act, 1994 by M/s Welcome Hotel Vadodara. The appellant argued that they provided various services like health club, fitness center, outdoor catering, and banquet hall services. They contended that the Revenue's notice denying abatement under Notification No.1/2006-ST for the period October 2008 to September 2009 was based on assumption and did not specify the nature of services for which they were not entitled to credit. The appellant highlighted that they availed various input services unrelated to mandap keeping services, such as telephone services, repair and maintenance, internet café, security services, technical consultancy services, and advertisement services, among others. 2. The Authorized Representative (AR) for the Revenue argued that the services listed by the appellant were directly or indirectly used for mandap keeping services. However, the Tribunal analyzed the issue and found that the crux of the matter was the interpretation of Notification No.1/2006-ST. The Notification granted abatement from the taxable value, subject to the condition that CENVAT credit of duty on inputs or capital goods or service tax on input services used for providing taxable services had not been availed under the CENVAT Credit Rules, 2004. The Tribunal observed that the appellant had indeed availed CENVAT credit for services like telephone services, repair and maintenance, internet café, security services, technical consultancy services, and advertisement services. These services were deemed common input services with a direct or indirect nexus to all hotel activities. 3. The Tribunal concluded that services like telephone services, repair and maintenance, technical consultancy services, contract services, and advertising services were essential for various hotel operations, including mandap keeping services. Therefore, it was determined that the appellant had availed CENVAT credit for input services used in providing mandap keeping services, contrary to their claim. Consequently, the Tribunal dismissed the appeal on the grounds that there was no merit in the appellant's arguments regarding the denial of abatement under Notification No.1/2006-ST. 4. In the final order pronounced on 03.05.2019, the Tribunal upheld the decision, emphasizing that the appellant had indeed availed CENVAT credit for input services related to mandap keeping services, thereby justifying the denial of abatement as per the Notification.
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