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2016 (4) TMI 290 - CESTAT MUMBAI

2016 (4) TMI 290 - CESTAT MUMBAI - 2016 (43) S.T.R. 211 (Tri. - Mumbai) - Change 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 tha .....

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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 .....

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ule 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 empo .....

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ST/432/11 filed by M/s. Piem Hotels Ltd. is directed against Order-in-Original No. 14/ST/201 dated 31.3.2011 passed by the Commissioner of Central Excise & Service Tax, Nashik and appeal No. ST/86184/15 filed by M/s. Indian Hotels Company Ltd. is directed against Order-in-Original No. 75 to 78/STC-I/SKS/14-15 dated 25.2.2015 passed by the Commissioner of Service Tax, Mumbai I. 2. The relevant facts that arise for consideration are that M/s. Indian Hotels Company Ltd. ( IHCL for short) are p .....

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ligible for 100% credit, even if used partly for exempt goods/exempt output services. A show cause notice was issued to Piem for denying the credit on the ground that the services provided by IHCL are covered under Business Auxiliary Service under Section 65(105)(zzb) and not under Management Consultancy Service under Section 65(105) (r) as claimed by IHCL, which was confirmed by the Commissioner along with interest and imposed penalties, against which Piem have filed the present appeal No. ST/4 .....

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records submitted that the service rendered by IHCL are in nature of advice, consultancy and assistance which are directly in connection with management of the respective hotels and, hence, squarely covered under Management or Business Consultant Service' under Section 65(105)(r) of Finance Act, 1994, under which they have paid service tax also. It was further submitted that as per Section 65(65) Management Consultant means any person who is engaged in providing any service, either directly .....

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STR 375 (T); Dabur India - 2015 (39) STR 1021 (T) and CBEC Circular No. 1/1/2001-ST dt. 27.6.2001. It was further submitted that the main part of the definition itself is very wide, which covers the activity carried out by IHCL and the inclusive part is expanding the meaning to cover even any advice, consultancy or technical assistance also and that the Dept. has ignored the main part of the definition and is trying to contend that IHCL are not providing any advice or consultancy by invoking th .....

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d to the Commissioner, while obtaining registration under Service Tax; Service Tax Registration Certificated issued to IHCL on 18.9.2001, under Management Consultancy Service'; Show Cause Notice dated 9.12.2002 issued to IHCL for appropriation of service tax and interest and for imposition of penalty and Order-in-Original dated 12.10.2011 confirming the specified demand and imposing penalty. It is her submission that the clauses of the agreements convey the role of the IHCL, which includes p .....

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f agreement is considered, the purpose and object of the arrangement is very clear, i.e. it is an arrangement for providing management consultancy and advice by IHCL for the functioning of various hotels of Piem. Further, the Department has not substantiated as to how and why the services provided by IHCL would be covered under Business Auxiliary Service'. The Counsel further submitted that operational or administrative assistance in any manner has been introduced under Business Support Serv .....

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of classification does not affect the assessments which have already acquired finality and the change in classification, in any case, would have prospective effect for which the Counsel relied various judgments like Casino Hotel - 2010 (19) STR 425 (T); CCE v. Cotspun Ltd. - 1999 (113) ELT 353 (SC); CCE v. Hi Flow Pump Co. - 2012 (282) ELT 286(T); Avenue Regent - 2010 (17) STR 284 (T); Taj View Hotel - 2014 (36) STR 888 (T) It was further submitted that the assessment in the present case, right .....

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availing credit of service tax paid on similar services provided by IHCL and were issued with Show Cause Notice for denial of credit, which was confirmed by the Commissioner and in appeal against the said Order, the Tribunal, vide Final Order No. A/11848/2014 dated 28.10.2014, invoking the ratio of Hon'ble Madras High Court judgment in the case of Mohan Breweries and Hon'ble Supreme Court judgment in the case of Sarvesh Refractories has held that the Revenue cannot change the classifica .....

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Federal Express Corporation [2014 (36) STR 375 (Tri-Mum)] and CBEC Circular N. 137/72/2008-CX.4 dated 21.11.2008. It was further submitted by the Counsel that since the classification of the service provided by IHCL cannot be changed retrospectively, the credit availed by Piem cannot also be denied and, therefore, both the Orders are not sustainable. 5. Learned Departmental Representative on the other hand reiterated the findings of lower authorities in both the cases and claimed that Managemen .....

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under Management or Business Consultancy Service' is to enable their own arm to avail 100% credit of cenvat in terms of Rule 6(5) of CCR, 2004; 6. We have considered the rival submissions and perused the records and find 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 bus .....

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