2017 (12) TMI 771 - AT - Service Tax

Tribunal overturns order demanding excess Cenvat credit, penalties, and interests. Services deemed eligible for credit.

The Tribunal allowed the appeals, setting aside the impugned order that confirmed the demand for excess Cenvat credit, penalties, and interests. The ... Change of classification of services - Held that: - there cannot be different classification for the same services at the end of service provider and at the end of service recipient - in the case of M/s. Piem Hotels Ltd, [2016 (4) TMI 290 - CESTAT MUMBAI], the Tribunal has held that it is well settled proposition of law that jurisdictional officer at recipient end are not empowered to question or change the classification or valuation at supplier's end - appeal allowed - decided in favor of appellant. Issues:Appeals against common impugned order - Cenvat credit availed on input services - Classification of services - Eligibility for Cenvat credit - Penalty under section 78 of Finance Act, 1994.Analysis:The appellants filed two appeals against a common impugned order passed by the Commissioner (A), upholding the order-in-original except for setting aside the penalty under section 78 of the Finance Act, 1994. The issue in both appeals being identical, they were disposed of by a common order. The appellants provided various services and availed Cenvat credit on input services, utilizing it for payment of service tax. Allegations were made that they had availed excess Cenvat credit during a specified period. Show cause notices were issued, and the demand along with penalties and interests were confirmed by the adjudicating authority.The appellant challenged the order before the Commissioner (A), who rejected the appeal, leading to the present appeals. The appellant argued that the impugned order was passed contrary to the law and binding judicial precedent. They contended that the services availed were in connection with taxable services on which service tax was paid, making them eligible for Cenvat credit. The appellant cited various authorities to support their interpretation of input services and classification of services received from Indian Hotels as management consultancy services.The Learned AR reiterated the findings of the impugned order. After considering the submissions and the judgments cited by the appellant, the Tribunal held that the issue had been settled by previous decisions. It was established that there cannot be different classifications for the same services at the end of the service provider and the service recipient. The Tribunal also noted that the Commissioner (A) had allowed a case on an identical issue previously. Following the precedents and legal principles established in the cited judgments, the Tribunal concluded that the impugned order was not sustainable in law. Consequently, the order was set aside, and both appeals of the appellants were allowed.In conclusion, the Tribunal found in favor of the appellants, setting aside the impugned order and allowing the appeals based on the established legal principles and precedents regarding the classification of services and eligibility for Cenvat credit on input services.