9911796707
TMI Blog2019 (10) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... x) Rs. 15,42,794/- Since the impugned order is common, both the appeals are being disposed of by this common order. 2. Briefly the facts of the present case are that the appellant are engaged in providing the taxable services under the categories of 'restaurant services', 'accommodation services', 'mandap keeper', 'maintenance and repair', 'banking and financial', 'health club and fitness centre services', 'security agency', 'business auxiliary services', 'internet café', and 'renting of immovable property services'. The appellant is paying service tax under the category of accommodation services, restaurant services after availing of abatement of 50% and 70% respectively on the gross value of receipt as provided vide Notification No.1/2006-ST dt. 01/03/2006 as amended vide Notification No.34/2011-ST dt. 25/04/2011. For the remaining services, they paid service tax at the prescribed rate applicable. As per the conditions of the Notification No.1/2006-ST dt. 01/03/2006, as amended, the abatement shall not apply in cases where the cenvat credit of duty paid on inputs or capital goods or the cenvat credit of service tax on input services has been taken for providing such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 and no reversal of CENVAT credit was made under Rule 6(3) of CCR. He further submitted that the dispute during the period is whether the accommodation income and restaurant income can be considered as an exempted service as defined under Rule 2(e) of CCR and reversal of credit under Rule 6(3) of CCR is required. he further submitted that as per sub-section 3 of Section 64, the act itself applies only to taxable services and the taxable service has been defined under Section 65(105) of the Act as those services which are expressly specified under the said provisions. Therefore, it may be understood that taxable services covers only those services which are expressly specified under Section 65(105) of the Act and which are either exempted from service tax or on which no service tax is leviable under Section 66 of the Act. He thereafter referred to the definition of exempted service as provided under Rule 2(e) of the CCR during the relevant period, which is reproduced herein below:- Rule 2(e) "exempted services" means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable under Section 66 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable under Section 66 of the Finance Act and taxable services whose part of value is exempted on the condition that no credit of inputs and input services, used for providing such taxable services, shall be taken;' Explanation- for the removal of doubts, it is hereby clarified that 'exempted services' includes trading; He further submitted that during this period, the appellant availed abatement with respect to restaurant service and accommodation service as per Notification No.1/2006-ST dt. 01/03/2006 as tabulated herein below:- Sl.no. Sub clause of clause (105) of Section 65 Description of taxable service Conditions Percentage 1 2 3 4 5 13. (zzzzv) Services provided or to be provided, to any person, by a restaurant, by whatever name called, having the facility of airconditioning in any part of the establishment, at any time during the financial year, which has license to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages, both in its premises; 30 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice has been exempted from the levy of service tax on the condition that the CENVAT credit on inputs and capital goods used for providing the taxable service has not been taken under the provisions of CCR. He further argued that there is no restriction with respect to availment of CENVAT credit on input services. The only restriction is with respect to availment of CENVAT credit on inputs and capital goods. Therefore the appellants are availing the benefit of abatement with respect to accommodation service and the same cannot be considered as exempted service. In respect of restaurant service, the appellants are not availing any abatement Notification. As per Rule 2C of the Service Tax (Determination of Value) Rules 2006, value of service portion involved in supply of food or any other article of human consumption or any drink in a restaurant has been fixed as 40% of the total value on the condition that CENVAT credit on inputs classified under Chapters 1 to 22 of the CETA, 1985. He further submitted that when the statute itself prescribes a certain percentage on the total value as the value of services, the remaining portion of the value would neither be considered as an abatem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed AR defended the impugned order. 6. After considering the submissions of both sides and perusal of the material on record, we find that during the period from 01/04/2008 to 30/04/2011, the appellant was not liable to pay service tax because the accommodation service and restaurant service became taxable only from 01/05/2011 and no CENVAT credit reversal was required under Rule 6(3) of the CCR. Further we find that during this period, there was a dispute that whether the restaurant service and accommodation service are subject to tax or not and the Kerala High Court in the case of Kerala Classified Hotels and Resorts Association and others had held that both restaurant service and accommodation service cannot be subjected to service because they do not fall in the definition of exempted service and therefore the question of reversal of CENVAT credit does not arise. For the subsequent period from 01/05/2011 to 30/06/2012, the appellant availed abatement with respect to restaurant service and accommodation service as per Notification No.1/2006-ST dt. 01/03/2006. During the relevant time, availment of abatement vide Notification No.1/2006-ST dt. 01/03/2006 cannot be considered as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order, the Commissioner is demanding more than Rs. 80 lakhs which is more than the total credit availed and on this ground also, the demand is not sustainable. Further we find that for the period April 2008 to March 2012, the entire demand is barred by limitation because the show-cause notice was issued on 21/10/2013 for the period April 2008 to March 2012 whereas the normal period of limitation is one year. Extended period in the present case cannot be invoked because the law on the point was not clear and the definition of exempted service was changed from time to time and the interpretational issue was involved. Therefore, in our view, the substantial demand for the period from April 2008 to March 2012 amounting to Rs. 69,76,592/- is entirely time barred. Further the Tribunal in the earlier order passed in favour of the appellant has observed in the finding that for the subsequent period, the Assistant Commissioner vide Order-in-Original No.44/ST/DIV(AC)/2017-18 dt. 31/10/2017 has dropped the demand in the show-cause notice raised on identical grounds. 7. In view of our discussion above, we are of the considered view that the appellants are not required to comply with the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
