100% Cenvat Credit can be taken on Input Service under the head of Management or Business Consultancy Service: CESTAT [Read Order]

Cenvat Credit - Input Service - Management - Business Consultancy Service - Consultancy Service - CESTAT - Customs - Excise - Service Tax - Taxscan

The Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that 100% Cenvat Credit can be taken on Input Service under the head of Management or Business Consultancy Service.

Gujarat Jhm Hotels Ltd, the appellantchallenged whether 100% credit of service tax paid by Indian Hotel Co. Ltd. (IHCL) under Management or Business Consultancy Services is admissible given specific coverage of the said service under Rule 6(5) of CCR, even though said services were used for taxable as well as non-taxable/exempt services.

It was submitted that the service provider M/s. Indian Hotels Co. Ltd. has provided service under the head of Management or Business Consultancy Services which is specified under Rule 6(5) of Cenvat Credit Rules, 2004 therefore, the appellant is entitled to 100% credit on such input service irrespective of whether the same was used in exempted as well as taxable service.

Further submitted that the issue of classification cannot be raised at the service recipient end. In the case of M/s. Indian Hotels Co. Ltd., it was held that the service of M/s. Indian Hotels Co. Ltd. provided to the various hotels similarly placed as the present appellant are Management or Business Consultancy Services and do not fall under Business Auxiliary Services.

It was evident that the classification of service cannot be challenged at the service recipient end. A Coram comprising of Mr Ramesh Nair, Member (Judicial) and Mr Raju, Member (Technical) observed that the appellant have correctly taken 100% credit in respect of such input service.

While allowing the appeal, the Tribunal quashed the entire order of the revenue, since the demand was not maintainable. Shri T.C. Nair appeared on behalf of the Appellant and Shri Prabhat Rameshwaram appeared for the Respondent.

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