TMI Blog2019 (10) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... arise - demand set aside. CENVAT Credit - period from 01/05/2011 to 30/06/2012 - abatement availed vide Notification No.1/2006-ST dt. 01/03/2006 - exempt services or not - Rule 6 of the CCR - HELD THAT:- The appellant availed abatement with respect to restaurant service and accommodation service as per Notification No.1/2006-ST dt. 01/03/2006. During the relevant time, availment of abatement vide Notification No.1/2006-ST dt. 01/03/2006 cannot be considered as exempted service for the purpose of reversal of CENVAT credit as per Rule 6 of CCR - demand set aside. CENVAT credit - period from 01/07/2012 to 31/03/2013 - appellants have availed the benefit of abatement with respect of accommodation service as per Sl.No.6 of the Notification No.26/2012 dt. 20/06/2012 - exempt services or not - HELD THAT:- For the demand for the period from 01/07/2012 to 31/03/2013, the definition of exempted service was again changed. The appellant during this time have availed the benefit of abatement with regard to accommodation service as per Sl.No.6 of the Notification No.26/2012 dt. 20/06/2012 which provides that 40% of the value of accommodation service has been exempted from the levy of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . GARG The appellant has filed these two appeals against the common Order-in-original dt. 25/11/2014 passed by the Commissioner of Central Excise, Thiruvananthapuram disposing of two show-cause notices. The details of both the appeals are given hearing below:- particulars SCN No.101/2013- ST(Commr) dt. 21/10/2013 SCN No.65/2014- ST(ADC) dt. 15/05/2014 Period of dispute April 2008 to March 2012 April 2012 to March 2013 Demand of CENVAT Credit ₹ 69,76,592/- ₹ 10,80,673/- penalty ₹ 69,76,592/- u/s 78 ₹ 10,000/- u/s 77 ₹ 5,40,336/- u/s 76 ₹ 10,000/- u/s 77 CENVAT credit availed ₹ 9,90,458/- (approx) ₹ 13,05,882/- CENVAT credit utilise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with penalties under Sections 76, 77 and 78 as shown in the table above. Aggrieved by the said order, appellant have filed the present appeals. 3. Heard both sides and perused the records. 4.1. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the definition of exempted service as provided in the CCR from time to time. He further submitted that the CENVAT credit availed and utilized in the present case can be broadly categorized as follows:- i. Demand relating to the period from 01/04/2008 to 30/04/2011, CENVAT availed ₹ 8,30,601/-, CENVAT utilized ₹ 6,32,576/-; ii. Demand relating to the period from 01/05/2011 to 30/06/2012, CENVAT availed ₹ 1,67,420/-, CENVAT utilized ₹ 3,44,701/-; and iii. Demand relating to the period from 01/07/2012 to 31/03/2013, CENVAT availed ₹ 12,98,319/-, CENVAT utilized ₹ 14,51,146/-. 4.2. He further submitted that for each period, the demand of service tax can be discussed as follows:- Dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regards restaurant income, he submitted that the same involves both supply of food and beverages and also services. He referred to the decision of the Hon ble Apex Court in the case of State of HP Vs. Associated Hotels of India Ltd. [1972 29 STC 474 (SC)] wherein the Apex Court held that the transaction in question cannot be considered as sale liable to sales tax as the same is a combination of both sale and service, which warranted a Constitutional Amendment to enable the state to tax it. He further submitted that both the accommodation income and restaurant income do not fall within the definition of exempted service. He also relied upon the decision of kerala High court in the case of Kerala Classified Hotels and Resorts Association and others Vs. UOI [2013(31) STR 257 (Ker.)] wherein it has been held that both the restaurant service and accommodation service cannot be subjected to service tax. This finding of the Single Member was upheld by the Division Bench of the High court of Kerala in the case of UOI Vs. Kerala Bar Hotels Association [2014(36) STR 1205 (Ker.)]. The learned counsel submitted that in view of the decision of the Kerala High court, both accommodation income an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that this notification shall not apply in cases where,- i. The CENVAT credit of duty on inputs or capital goods of the CENVAT credit of services tax on input services, used for providing such taxable services, has been taken under the provisions of the CENVAT Credit Rules, 2004; or ii. The service provider has availed the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.12/2003-Service Tax dated the 20th June, 2003 (GSR 503(E), dated the 20th June, 2003. He further submitted that as per the Notification cited above, in order to avail the benefit of abatement, there is a restriction that the service provider neither avails CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input services. However, in order to fall within the definition of exempted service, the usage of word is inputs and input services as against the word inputs or capital goods or input services used in the abatement notification. Therefore the abatement availed vide Notification No.1/2006-ST dt. 01/03/2006 cannot be considered as exempted service for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be covered under the definition of exempted service and hence, the provisions of Rule 6 is not applicable. The learned counsel also submitted that this Tribunal vide its Final Order No.21118/2018 dt. 08/08/2018 on identical issue relating to the period from 01/04/2013 to 31/03/2014 has held that the restaurant service and accommodation service on which abatement is claimed by the appellant are not exempted services as defined under rule 2(e) of CCR. 4.3. Learned counsel further submitted that as per the impugned order, the Commissioner has disallowed the CENVAT credit amounting to ₹ 80,57,265/- for the period April 2008 to March 2013 whereas in fact the appellant had availed the total credit of approximately ₹ 10 lakhs for the period from April 2008 to March, 2012 and ₹ 13,05,882/- for the period from April 2012 to March 2013. He also submitted that even if for the sake of argument, the impugned services rendered by the appellant is treated as exempted services, the reversal of credit should be on proportionate basis as provided under rule 6(3A) of the CCR,. He further submitted that the Commissioner has denied this benefit on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01/03/2006 cannot be considered as exempted service for the purpose of reversal of CENVAT credit as per Rule 6 of CCR. Further for the demand for the period from 01/07/2012 to 31/03/2013, the definition of exempted service was again changed. The appellant during this time have availed the benefit of abatement with regard to accommodation service as per Sl.No.6 of the Notification No.26/2012 dt. 20/06/2012 which provides that 40% of the value of accommodation service has been exempted from the levy of service tax on the condition that credit on input and capital goods used for providing the taxable service have not been taken under the provisions of CCR. Further we find that there was no restriction with respect to availment of CENVAT credit on input services as per the said notification and the only restriction was with respect to the availment of CENVAT credit on inputs and capital goods. The appellants are availing the benefit of abatement with respect to accommodation services under the Notification which cannot be considered as exempted services. As far as, restaurant services are concerned, the appellants are not availing any abatement notification. Further we find that as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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