Practice being adopted by leading Hotel Chains to utilize Cenvat Credit beyond permissible limits – reg.

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....iate action and calling for the action taken report. In the said letter dated 27.03.2009, the Commissioner Service Tax, had informed this office about irregular availment of Cenvat Credit by leading hotel chains, as reported to him by the Chief Commissioner, Customs & Central Excise, Chandigarh vide letter C.No. 06-Zone 14-S.Tax-2009 dated 5th March, 2009. The issue in this case was that M/s Taj GVK were taking credit of the entire amount of Service Tax paid in respect of the services provided by the service provider viz. M/s Indian Hotel Corporation Ltd.(IHCL) even though services of M/s IHCL were being used by M/s GVK for providing both taxable and exempted services. M/s GVK were availing the aforesaid full credit on the ground that the ....

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....pport Service or Business Auxiliary Service or Franchise Service, as the case may be, depending on the exact nature of services provided in a particular case. In this context, Chandigarh and Jaipur-I Commissionerates had requested Mumbai-I Service Tax Commissioner to change the classification of the services provided by M/s. IHCL from 'Management Consultant's Services' to 'Business Support Service' or 'Business Auxiliary Service'. In so far as services provided by M/s Indian Hotel Company Ltd. is concerned, Service Tax-I Commissionerate, Mumbai has also opined that the services rendered by M/s IHCL, Mumbai were not in the nature of 'Management Consultancy Service', as claimed by them, and that the same would appropriately be classified und....

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....se, Chandigarh I to file appeal before CESTAT. In the review order, the committee observed that 'M/s IHCL, the service provider was not mentioning the classification of the service provided on the invoices issued by them to the noticee; that non indication of classification in the invoices tantamount to suppression of material fact with intent to wrongly avail (to read 'wrongly pass on') the benefit of Rule 6 (5) of Cenvat Credit Rules, 2004; that the adjudicating authority erred in deciding the case which should have kept the case pending till the decision of Commissioner, Service Tax, Mumbai ( to whom a reference was made earlier) is communicated to him'. The committee further observed that 'the burden of proof regarding the admissibility....