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ST – It is inconceivable that appellant would not have availed Advertising services, Telephone services, Repair and maintenance service of air conditioning during provision of Mandap keeper services – since CENVAT credit availed, benefit of 1/2006-ST is not admissible: CESTAT

2019-TIOL-2244-CESTAT-AHM

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH, AHMEDABAD
REGIONAL BENCH
COURT NO. III

Service Tax Appeal No. 11207 of 2014-DB

Arising out of OIA-PJ-634-635-VDR-I-2012-13, Dated: 29.03.2013
Passed by Commissioner of Central Excise, Customs and Service Tax-VADODARA-I

WITH
Service Tax Appeal No. 12107 of 2013-DB

Arising out of OIA-PJ/634-635/VDR-I/2012-13, Dated: 29.03.2013
Passed by Commissioner of Central Excise, Customs and Service Tax-VADODARA-I

Date of Hearing: 03.04.2019
Date of Decision: 03.05.2019

M/s WELCOME HOTEL VADODARA
R.C. DUTT ROAD, ALKAPURI, VADODARA

Vs

COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX
VADODARA-I, 1ST FLOOR, ANNEXE, RACE COURSE
VADODARA-390007

Appellant Rep by: Shri Ajay Aggrawal, Adv.
Respondent Rep by: Shri A Mishra, Authorized Representative

CORAM: Ramesh Nair, Member (J)
Raju, Member (T)

ST – The assessee is a hotel which provides various services such as health club and fitness centre & outdoor catering – The issue at hand pertains to the interpretation of Notification No.1/2006-ST – This Notfn provides abatement from taxable value subject to condition that Cenvat credit of duty on inputs or capital goods or the Cenvat credit of service tax on input services, used for providing such taxable services, has not been taken under the provisions of the CCR, 2004 – The abatement was denied to the assessee on grounds that the it had availed Cenvat credit on Mandap Keeper Services – Hence the present appeal.

Held – Apparently, the assessee can avail credit for all services except for those which are used for providing the services specified in Notification No. 1/2006-ST – In the instant case, the assessee admittedly availed credit of Telephone services, Repair and maintenance (telephone lines laundry, air conditioning), Internet café, contract services (Security services), Technical consultancy service (services used running hotel), Advertisement services, rent a hotel counter service – The services such as Telephone services, Repair and maintenance services, Technical consultancy service, contract services, Advertising services are common input services having direct or indirect nexus with activities undertaken by the hotel – For instance, to obtain mandap keeping service, the assessee would have used Advertising services to attract the customers, Telephone services to interact with them, Repair & maintenance service of control room and and AC for maintenance of light and air conditioning during provision of Mandap Keeping Service – Hence there is no merit in assessee’s claim to have not availed credit of input services used in providing Mandap Keeping service – Hence the assessee’s appeal lacks merit: CESTAT

Assessee’s appeals dismissed

FINAL ORDER NOS. A/10785-10786/2019

Per: Raju:

This appeal has been filed by the M/s Welcome Hotel Vadodara against demand of service tax, interest and imposition of penalty under Section 76 of the Finance Act, 1994.

2. Ld. Counsel for the appellant pointed out that their hotel providing various services like health club and fitness centre and outdoor catering etc. Ld. Counsel pointed out that during the provision of services. He pointed out that while providing services of hi tea/catering, they also provide space like a banquet hall. Ld. Counsel pointed out that while providing this service hi tea/ meals along with banquet facility, they included the amount received for sale of food in the assessable value of the mandap keeper service. He argued that in the result they had paid, apart from service tax on the value of under the head of food and catering service, VAT on the sale of food. He argued that it resulted in double taxation. He pointed out that during the period October 2008 to September 2009 Notification No.1/2006-ST dated 01.03.2006, prescribed that any hotel providing Mandap keeper along with catering service was entitled to abatement calculated at 60% of gross amount charged, subject to the condition that no credit is availed of Service Tax paid on input services, excise duty paid on inputs/capital goods, used to be providing capital service under Cenvat Credit Rules, 2004. He pointed out that the SCN issue by Revenue for the period October 2008 to September 2009 holding that the appeal are not entitled to the abatement under the said Notification. He argued that the said notices do not point out that which credit in respect of the taxable services, they were not entitled. He argued that the SCN was based on assumption. Ld. Counsel argued that the condition of not availing Cenvat Credit relates to only though services which were “used for providing such taxable service”. He pointed out that the appellant were free to take credit of all other input services, inputs and capital goods. He argued that in this circumstances benefit cannot be denied without identifying the nature of services/inputs/ capital goods used for providing the services, in respect of which above Notification has been sought to be denied. He pointed out that they have availed input services like Telephone services, Repair and maintenance (telephone lines, laundry, air conditioning, etc), Internet café, contract services (Security services), Technical consultancy services (services used running the hotel), Advertisement services, rent a hotel counter service etc. He argued that none of this at any relation to the mandap keeping services and thus the benefit of Notification No. 1/2006-ST cannot be denied.

3. Ld. AR relies on the impugned order. He pointed out that the services listed by the appellant are directly or indirectly used for the mandap keeping services.

4. We have gone through the rival submissions. We find that the entire issue relates to the interpretation of Notification No.1/2006-ST. The said Notification grants to exemption, in the form of abatement from the taxable value, subject to the condition that the CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable services, has been taken under the provisions of the CENVAT Credit Rules, 2004. 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 café, 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. In these circumstances, it cannot be said that the appellant has not availed CENVAT credit of services used in provision of the mandap keeping service. For example to obtain mandap keeping service the appellant would have used the Advertising services to attract the customers, Telephone services to interact with the customers, the Repair and maintenance service of electrical control room and air conditioning for maintenance of light and air conditioning during the provision of mandap keeping service etc. In this circumstances, we do not find merit in the claim of appellant they have not availed the credit of input services used in provision of mandap keeping services.

5. In view of the above, I do not find any merit in the appeal and same is dismissed.

(Order pronounced in the open court on 03.05.2019)

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