2017 (9) TMI 1755 - AT - Central Excise

Tribunal upholds Cenvat credit for 'Management Consultancy Services' based on valid invoices

The Tribunal dismissed the Revenue's appeal and affirmed the respondent's entitlement to the Cenvat credit availed based on invoices issued by M/s. Indian ... Utilization of CENVAT Credit - change in classification of service from Management Consultant Services to Business Auxiliary Services/Business Support Services? - Held that:- Identical issue decided in the case of M/S PIEM HOTELS LTD, THE INDIAN HOTELS COMPANY LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, COMMISSIONER OF SERVICE TAX [2016 (4) TMI 290 - CESTAT MUMBAI], where it was held that the proceedings for change of classification at the service providers end were initiated in 2011 and concluded vide Order-in-Original dated 25-2-2015. Such change in classification was held as not affecting the credit already availed by the service recipients prior to the said date and thus, the credit cannot be denied. Credit allowed - appeal dismissed - decided against Revenue. Issues:Classification of services for Cenvat credit availed based on invoices issued by M/s. Indian Hotel Company Limited.Analysis:The appeal concerns the classification of services provided by M/s. Indian Hotel Company Limited for the purpose of availing Cenvat credit. The Revenue argues that the services should be classified as 'Business Auxiliary Services' or 'Business Support Services', limiting the credit utilization to 20%, as opposed to the 100% credit claimed by the respondent based on the classification of 'Management Consultant Services'.Upon review, the Tribunal found that a similar dispute had been addressed in a previous case involving M/s. Piem Hotels Ltd. and M/s. Indian Hotel Company Limited. In that case, it was established that M/s. Indian Hotel Company Limited was registered under the category of Management Consultancy Services, issued invoices after paying Service Tax under this category, and filed ST-3 returns with the relevant authorities. The Tribunal noted that any change in classification initiated by the service provider in 2011 did not impact the credit already availed by the recipients prior to that date.Considering the similarity of facts between the previous case and the present appeal, covering the period from April 2005 to March 2009, the Tribunal concluded that the Revenue's appeal lacked merit. The Tribunal upheld the respondent's right to the credit availed during the specified period, in line with the precedent set by the earlier case.In light of the above analysis and the established legal principles, the Tribunal dismissed the Revenue's appeal, affirming the respondent's entitlement to the Cenvat credit availed based on the invoices issued by M/s. Indian Hotel Company Limited during the relevant period.