2014 (2) TMI 861 - AT - Service Tax

Waiver of pre-deposit - Cenvat Credit - 100% credit as per Rule 6(5) of CCR, 2004 while providing taxable and exempted services of service tax paid by Indian Hotels Limited - Revenue entertained a view that the service rendered by Indian Hotels Limited were not Management or Business Consultancy services but were franchisee services. - Held that - it is a well settled proposition of law that classification cannot be changed in the hands of the service recipient. - stay granted. Availing Cenvat Credit while availing abatement - mandap keeper services - Notification No. 12/2004-ST and Notification No. 1/2006-ST - Held that - the appellant has a good prime-facie case for the period prior to 1.3.2006. However, as the demand also falls under March 2006 period, we are of the view that the appellant is required to deposit the said demand. Ld. Advocate clarifies that the same would be around ₹ 3.11 lakhs. - stay granted partly.

Summary

Issues:
1. Classification of services provided by Indian Hotels Limited - Management or Business Consultancy vs. Franchisee services.
2. Availment of cenvat credit on services received.
3. Discrepancy in availing abatement and input service tax credit.
4. Classification of services under different categories for service tax payment.
5. Excess availing of cenvat credit.
6. Demand related to GTA services.

Analysis:
1. The primary issue in this case revolves around the classification of services provided by Indian Hotels Limited to the appellant. The appellant was availing services under the category of 'Management or Business Consultancy' and claiming 100% cenvat credit based on the tax paid by the service provider. However, the revenue contended that the services were actually franchisee services, not covered under Rule 6(5) for full credit availment. The Tribunal noted that the service classification cannot be changed by the recipient and granted a stay on the demand, considering a similar case precedent.

2. Another aspect of the case involves the discrepancy in availing abatement and input service tax credit by the appellant while providing mandap keeper services. The Tribunal analyzed the relevant notifications and clarified that the appellant could avail cenvat credit on input services before a specific date, directing a partial deposit towards the demand for the period post that date.

3. The confirmation of service tax demands on various services like mandap keeper, internet, beauty parlour, and Vodafone Tower Rental under different categories raised concerns. The Tribunal found the demand unjustified as the appellant had already discharged the service tax under separate categories, thereby waiving the pre-deposit condition for these demands.

4. The case also addressed the excess availing of cenvat credit beyond 20% and other undisputed demands, directing the appellant to deposit the agreed amounts. Additionally, the demand related to GTA services was analyzed, with the Tribunal finding no justification for any deposit due to the appellant's compliance and correction of incorrect invoices.

5. In conclusion, the Tribunal directed the appellant to deposit a total amount within a specified period, waiving the pre-deposit condition for the balance amount of duty, penalty, and interest pending the appeal's disposal. Compliance was required by a set date to avoid further action on the outstanding amounts.