9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (2) TMI 70 - AT - Service TaxCENVAT Credit of service tax paid - Management or Business Consultancy Services - services were used for taxable as well as non-taxable/exempt services or not - power of jurisdictional Officers of the Appellants to question the correctness or change the classification of service adopted by the provider of such service - suppression of fact, willful mis-statement etc. - suppression of fact, willful mis-statement etc. - extended period of limitation - penalty - disputed issue pertains to interpretation of law. HELD THAT - In the present case the cenvat credit was denied in respect of service received by the appellant from M/s. Indian Hotels Co.Ltd. on the pretext that the same is classifiable under Business Auxiliary Service which is not specified under Rule 6(5) of Cenvat Credit Rules, 2004. The contention of the appellant is that the service provider M/s. Indian Hotels Co. Ltd. has provided the services under the head of Management or Business Consultancy Services, accordingly, the classification of service cannot be challenged at the service recipient end. Moreover, the classification of same service was challenged by the department and proceedings were initiated against M/s. Indian Hotel Co. Ltd., the matter was decided by this tribunal in PIEM HOTELS LTD. case 2016 (4) TMI 290 - CESTAT MUMBAI . It can be seen that the same services provided by IHCL to M/s. Piem Hotels Ltd. was held classifiable under Management or Business Consultancy Services and not under Business Auxiliary Service accordingly, the Management or Business Consultancy Services clearly specified under Rule 6(5) of Cenvat Credit Rules, 2004 therefore, the appellant have correctly taken 100% credit in respect of such input service. As per this judgment, the entire foundation of the revenue s case gets demolished therefore, the demand cannot be sustained on merit. Appeal allowed.
Issues Involved:
1. Admissibility of 100% credit of service tax paid by IHCL under Management or Business Consultancy Services to Gujarat JHM Hotels. 2. Empowerment of jurisdictional Officers to question service classification. 3. Invocability of extended period and penal provisions without suppression of facts in case of interpretation of law. Issue 1 - Admissibility of 100% Credit: The appellant, Gujarat JHM Hotels, sought 100% credit on service tax paid by IHCL under Management or Business Consultancy Services, citing Rule 6(5) of CCR, regardless of usage in taxable or exempt services. The appellant argued that classification issues cannot be raised by the recipient. Previous tribunal decisions supported this stance, classifying IHCL's services as Management or Business Consultancy Services, not Business Auxiliary Service. The appellant contended that the demand was time-barred due to proper compliance, disallowing extended period and penal provisions. Issue 2 - Empowerment of Jurisdictional Officers: The tribunal determined that IHCL's services to Piem Hotels were correctly classified as Management or Business Consultancy Services, not Business Auxiliary Service, as per Rule 6(5) of CCR. The tribunal emphasized that jurisdictional officers at the recipient's end lack authority to challenge or alter the supplier's classification based on legal precedents. The change in classification at IHCL's end did not affect Piem Hotels' prior credit claims. The tribunal allowed the appeals, emphasizing the correct classification and the recipient's limited role in reviewing supplier classification. Issue 3 - Extended Period and Penal Provisions: The tribunal found the demand unsustainable on merit due to the correct classification of IHCL's services. As the appeal was decided on its merits, other issues like time bar were not addressed. The impugned order was set aside, and the appeals were allowed based on the correct classification of services under Rule 6(5) of CCR. In conclusion, the judgment clarified the admissibility of 100% credit for IHCL's services under Management or Business Consultancy Services to Gujarat JHM Hotels, upheld the limited authority of jurisdictional officers in service classification matters, and ruled out the invocability of extended period and penal provisions without evidence of suppression of facts in cases involving interpretation of law.
|
