Custom, Excise & Service Tax Tribunal
Taj Kerala Hotels And Resorts Ltd vs Commissioner Of Central Excise, ... on 15 November, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/22939/2014-SM, ST/22943/2014-SM [Arising out of Order-in-Appeal No. 413-2014 dated 27/05/2014 passed by Commissioner of Central Excise and Service Tax , COCHIN( Appeal) ] [Arising out of Order-in-Appeal No. 412-2014 dated 27/05/2014 passed by Commissioner of Central Excise and Service Tax , COCHIN( Appeal) ] Taj Kerala Hotels And Resorts Ltd The Gateway Hotel Marine Drive, Ernakulam COCHIN - 00 KERALA Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Cochin-cce C R BUILDING, I S PRESS ROAD, ERNAKULAM, COCHIN, - 682018 KERALA Respondent(s)
Appearance:
JRS ASSOCIATES ADVOCATES & CONSULTANTS #41/3787,1ST FLOOR,CARAMEL CENTRE BANR=ERJI ROAD COCHIN - 682018 KERALA For the Appellant Shri Jose Jacob, Adv.
For the Appellant Shri N JAgadish, AR For the Respondent Date of Hearing: 15/11/2017 Date of Decision: 15/11/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 22803-22804 / 2017 Per : S.S GARG The appellants have filed these two appeals against the common impugned order dated 27.05.2014 passed by the Commissioner (A) whereby the Commissioner (A) has upheld the order-in-original except for setting aside of the penalty under section 78 of Finance Act, 1994. Since the issue involved in both the appeals is identical, therefore both the appeals are being disposed of by this common order. The details of both the appeals are given below:
Sl.No. Appeal No. O/o No./Date Demand Penalty 01 160/ST/CHN/10 13/10/25.02.10 Rs. 45,63,287 76 & 78 02 210/ST/CHN/11 71/11/13.09.11 Rs. 18,55,070 Rs. 10,58,613 76 & 77 76 & 77
2. Briefly the facts of the case are that the appellants are providing mandap keeper service, tour operator, health club & fitness center service, dry cleaning service, internet and outdoor caterer service. It was noticed that the appellant was availing Cenvat credit on input services such as telephone charges, security services, rent a cab, management consultancy, courier service and interior decorator services and utilizing it for payment of service tax.
2.1 They were having taxable and non-taxable services and hence they were eligible to only 20% of the service tax payable upto 31.03.2008 and proportionate credit of 18.91% for 2008-09 and 19.17% for 2009-10. They had availed full credit on the service tax paid by M/s. Indian Hotels for providing what they claim to be management consultancy services and utilized it for payment of service tax. It was alleged that they have availed excess Cenvat credit as detailed above during the period 01.01.2006 to 31.03.2010.
3. On these allegations, show cause notices were issued to the appellant and after following the due process, the adjudicating authority confirmed the demand along with penalties and interests.
4. Aggrieved by the said order, the appellant filed appeal before the Commissioner (A) whereby the Commissioner (A) rejected the appeal and hence the present appeals.
5. Heard both the parties and perused the records.
6. The Learned Counsel for the appellant submitted that the impugned order is not sustainable in law as the same is passed contrary to the law and binding judicial precedent. He further submitted that the services availed by the appellant are in connection with the provisions of taxable service on which service tax is duly being paid and hence classified to be input services as defined by Rule 2(l) of CCR 2004. He further submitted that by virtue of wide interpretation given to the term input service, any services received in relation to taxable service could be utilized for availing the CCR. He also submitted that since the service provided on output service in respect of taxable and non-taxable service being the same and the administrative infrastructure relating to the said services being the same, the services availed by the appellant are in connection with the provisions of various taxable services on which service tax is duly paid and hence clarified to be input service for the purpose of CCR, 2004. He further submitted that services received from Indian Hotels is in the nature of management consultancy service and not business auxiliary/support service. He further submitted that Indian Hotels had classified the service under management consultant service and paid service tax accordingly. Therefore, the department could not deny the credit of the said service tax paid at the service recipient and service receivers end. In support of this submission, he relied upon the following authorities:
* Sarvesh Refractories (P) Ltd. Vs. CCE 2007 (218) ELT 488 (SC); * CCE Vs. MDS Switchgear 2008 (229) ELT 485 (SC); * CCE & C Vs. Purity Flexpack Ltd 2008 (223) ELT 361 (Gujarat); * CCE & C Vs. MDS Switchgear Ltd 2008 (229) ELT 485 (SC); * Hindustan Lever Ltd 2000 (121) ELT 437 (T); * Hindustan Coca Cola Beverages Pvt Ltd Vs. CCE, Meerut-II (2010) 19 STR 280 (Cestat, New Delhi); * Manikgarh Cement Vs. CCE, Nagpur (2010) 20 STR 600 (Cestat, Mumbai); * Pacific Exports Vs. CCE, Ahmedabad (2013) 31 STR 14 (Cestat, Mumbai); * M/s. Piem Hotels Ltd Vs. CCE, Nasik, CST, Mumbai 2016-TIOL-788-Cestat-Mum
7. On the other hand, the Learned AR reiterated the findings of the impugned order.
8. After considering the submissions of both the parties and perusal of material on record as well as various judgments relied upon by the appellant cited supra, I am of the considered view that the issue involved in the present case is no more res intergra and has been settled by various decisions cited supra wherein it has been consistently held that there cannot be different classification for the same services at the end of service provider and at the end of service recipient. Further, I also find that for the same service, the Commissioner (A) vide his order dated 06.03.2007, has allowed the case on identical issue. Further, I also find that in the case of M/s. Piem Hotels Ltd, cited supra, the Tribunal has held that it is well settled proposition of law that jurisdictional officer at recipient end are not empowered to question or change the classification or valuation at suppliers end passed on various judgments of Apex Court. Therefore, by following the ratios of the above decisions, I am of the view that the impugned order is not sustainable in law and therefore the same is set aside by allowing both the appeals of the appellants.
(Operative portion of the Order was pronounced in Open Court on 15/11/2017) S.S GARG JUDICIAL MEMBER RB 1