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2018 (5) TMI 1715 - CESTAT NEW DELHIClaim of benefit of Abatement while availing Cenvat Credit - restaurant and short term accommodation services - Held that:- The appellant does not deny the fact that they have availed the credit on input services. A part of the input services is exclusively used for provision of taxable services for which service tax is payable at full rate. Since such cenvat credit has been used only for payment of service tax on taxable service at full rate, there can be no objection to allow the same - the appellant has followed the proportionate method for availment of credit on common input services. It cannot be said that the appellant has availed any credit on input services used in providing exempted service - Further, the reversal of credit satisfies the requirement of non availment of credit laid down in the Notification No. 1/2006-ST ibid. The procedure prescribed in Rule 6(3A) of the Credit Rules is only to make the provisions of Rule 3 workable. By means of proportionate reversal the requirement of Rule 6(3) has been substantially satisfied. This is also provided in Rule 6(3D) of the Cenvat Credit Rules which was introduced at a later date - benefit of abatement cannot be denied. Demand of service tax - open restaurant (without air conditioning) in the Hotel - Department was of the view that service tax was liable to be paid for the service carried out in the open air restaurant, since the facility of air conditioning was available in certain other parts of the hotel establishment - Held that:- It is undisputed that the open air restaurant does not have the facility of airconditioner. Hence, such restaurant cannot be said to be covered within the definition of the service - the CBEC Circular No. 139/8/2011-TRU dated 10.05.2011 clarifies that within the same entity, if there are more than one restaurants, which are clearly demarcated the one with A/C alone will be liable to service tax - there is no justification to demand service tax on the income from open air restaurant. Appeal allowed - decided in favor of appellant.
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