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2019 (7) TMI 774 - CESTAT NEW DELHIAbatement claim - short term accommodation services - restaurant services - appellant was alleged to have evaded an amount of ₹ 83,59,428/- during the period from October, 2013 to March, 2014 on the ground that since the appellant has availed the cenvat credit on input services, the benefit of abatement to Notification No. 26/2012–ST dated 20.06.2012 is not available to them - benefit was also denied on the basis of Rule 2C of Service Tax (Determination of Value) Rules, 2006 - HELD THAT:- The condition for availment of abatement qua the services of short term residence/ lodging the credit on inputs and capital goods should not have been availed. Admittedly, the said credit has not been availed. The condition is absolutely silent about availment of credit on input services. Hence, we are of the opinion that the Adjudicating Authority below has committed an error while considering the availment of credit on input services as the condition for denial of the benefit of said Notification. Rule 2(c) of Service Tax (Determination of Value) Rules, 2006 - services provided by the restaurant - HELD THAT:- Perusal of rule makes it clear that 40% abatement on total amount is availed in case of restaurant services. Explanation 2 thereof clarifies that the provider of taxable service shall not take the cenvat credit of duties or cess paid on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 i.e. the availment of credit only on goods as mentioned above is the condition for availment of the said abetment qua restaurant services. Apparently and admittedly, cenvat credit was availed on input services hence denial of the benefit of the impugned Notification qua restaurant services is also held as unreasonable rather illegal. Proportionate availment of cenvat credit - HELD THAT:- Once the appellant has followed the proportionate method for availment of credit on common input services, it cannot be said that appellant has availed any credit on input services used in providing exempted services. The same is otherwise permissible in terms of Rule 6 of Cenvat Credit Rules, 2004. The Commissioner has committed an error while not referring any findings qua the said issue. Appeal allowed - decided in favor of appellant.
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