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2016 (4) TMI 290 - AT - Service TaxChange of classification of the service from “Management Consultancy Service” to “Business Auxiliary Service” - Providing hospitality services under Management or Business Consultant's Service - Held that:- the nature of service provided by IHCL is of the kind of advice, consultancy and assistance which are directly in connection with management of the respective hotels. It is clear from the submissions and the records that IHCL is not managing or conducting the hotel business of Piem on their behalf, but are only providing the management consultancy and advice by posting only key senior personnel to assist Piem to conduct their hotel business with their own infrastructure and manpower. Further, it is noticed that IHCL is not providing any service on behalf of Piem to Piem's customers, nor are IHCL promoting the hotel business of Piem. Therefore, the services provided by IHCL to Piem cannot be termed as Business Auxiliary Service and the services provided by IHCL is squarely covered under Management or Business Consultant's Service, classifiable under Section 65(105)(r) of Finance Act, 1994, supported by the Tribunal judgments in RPG Enterprise Ltd. Vs CCE, Mumbai [2008 (4) TMI 168 - CESTAT MUMBAI] and Shervani Indus Syndicate Vs CCE, C & Service Tax, Allahabad [2009 (1) TMI 44 - CESTAT, NEW DELHI]. Also, the change of classification at the end of IHCL would be prospective and cannot have retrospective operation, as held by this Tribunal in various judgments. So, the services provided by IHCL is correctly and appropriately classifiable under Management & Business Consultant's Services and not under Business Auxiliary Service and the jurisdictional officers at recipient's unit are not empowered to review or revise the classification at supplier/ provider's end. Denial of Cenvat credit - Being recipient of such service, appellant took the credit of service tax paid on such services under Rule 6(5) of Cenvat Credit Rules - Held that:- since Piem Hotels have taken credit during the period April 2005 to September 2010 and the classification has been changed at IHCL's end, such change in classification would not affect the credit taken by Piem during the period prior thereto. Therefore, the jurisdictional authorities at Piem Hotels have committed an apparent error in denying the credit and it is well settled position of law that jurisdictional officers at recipient's end are not empowered to question or change the classification or valuation at supplier's end based on various judgments of Hon'ble Apex Court. So, Cenvat credit cannot be denied. - Decided in favour of appellant
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