Availability of Cenvat credit on invoices issued by Mandap Keeper not as per Rule 4A of STR, 1994

PJ/Case Laws/2011-12/1549

Case: M/s Six Sigma Certification (P) Ltd. Vs Commissioner of Central Excise, Noida

Citation: 2012-TIOL-162-CESTAT-DEL

Issue:- Cenvat credit of service of Mandap Keeper by Hotels - whether can be denied if invoices not according to Rule 4A of Service Tax Rules, 1994?

Brief Facts:- Appellant were providing service of technical inspection and certification since 24.11.2004. From 25.8.04, they have been registered for providing services under category of “commercial training and coaching services” also. For providing commercial training or coaching services, appellants took conference rooms in five star hotels along with various facilities such as lighting, furniture, fixtures, conference room, garden etc. For such services, the hotels pay service tax under the head of Mandap Keeper Services. The appellant were taking Cenvat credit on service tax paid by the hotel.

Revenue found that during the period 1.4.05 to 30.9.07, the appellants had taken Cenvat credit on service tax on various services based on documents which do not have all the necessary details as prescribed under Rule 9 of Cenvat Credit Rules, 2004 read with Rule 4A of Service Tax Rules, 1994.

Demand of recovery of cenvat credit availed with interest and penalty equal to the said amount under Section 78 of the Finance Act, 1944 was imposed in adjudication proceedings. Appeal before the Commissioner (Appeal) was rejected.

Hence, appellant is before the Tribunal and application for stay and waiver of pre-deposit is also filed.

Appellant’s Contention:- Appellant submitted that out of total disputed amount of Rs. 659672/-, Rs. 376271/- relates to invoices issued by hotel and the remaining amount relates to invoices like advertisement in newspapers for canvassing participation in such training amounting to Rs. 225515/-. Another major disputed item relates to telephone services for service tax amounting to Rs. 49073/-

They have produces the letters of service providers like Reliance Infocom, Bharati Airtel to prove that telephone services have been provided to them (Appellant) and the service providers had paid the service tax shown in the invoices raised. The service tax registration no. is also indicated in such letters.

The appellant fairly concedes that there is an amount of Rs. 8722/- corresponding to invoice in the name of the Director and not used by the company for providing output service.

Appellants have submitted letters from different hotels certifying that the payments were in relation to conferences held by appellant and service tax at appropriate rate was paid on such invoices.

Respondent’s Contention:- Revenue argued that bills produced wherein the service is described as “Banquet” are basically for food provided to the participants and therefore, the appellants were not eligible for cenvat credit on the same. It is submitted that on some bills the name of invoices was not clearly indicated.

It was contended that in invoices for items related to telephone services for service tax, details required such as service tax registration number, name and address of service provider and category of service are not mentioned.

Revenue argued that organizing conference is not an input service for commercial coaching or training. In the case of service provided by courier and telephone companies, credit is taken based on invoices which do not indicate the details specified in Rule 4A of the Service tax Rules. Therefore the demand has rightly confirmed. Attention was drawn of particular bill which indicated description as conference and description of service provided as lunch/dinner NV and it was a proforma invoice.

Reasoning of Judgment:- The Tribunal held that prima facie it cannot be denied that appellants have availed the services of five star hotels for conducting training given by them. The main component of such service is providing conference hall which comes within the meaning of Mandap Keeper Service under Finance Act, 1944. The aggregate value of such services is the amount received by the Mandap keeper for such service. If this amount indicates value of food separately, the service provider is eligible for claiming rebate. However, as rebate is not claimed in this case, Revenue cannot force service provider to claim abatement.

In the case of telephone service, the objection relates to some missing details furnished subsequently. No reason for insisting on pre-deposit. Only amount of Rs. 8, 722/- ordered to be pre-deposited as bills are in the name of director.

Decision:- Stay application allowed accordingly.

Comments

PJ/Case Laws/2011-12/1549

Post a Comment

Query