Lemon Tree Premier Vs Commissioner of Central Tax Hyderabad-IV (CESTAT Hyderabad)
The CESTAT Hyderabad considered whether the appellant was entitled to the benefit of CENVAT credit on 16 specified input services while also claiming abatement under Notification No. 1/2006-ST dated 01.03.2006.
The appeal challenged the Order-in-Original dated 25.10.2013, by which the Commissioner, Customs, Central Excise & Service Tax, confirmed service tax demands of ₹26,98,168 under Restaurant Service and ₹65,40,315 under Short-term Accommodation Service under Section 73(2) for the period from 1 April 2011 to 30 September 2011 and 1 October 2011 to 31 March 2012. The demands were raised on the ground that the appellant had claimed abatement under Notification No. 1/2006-ST while discharging service tax liability by utilising accumulated CENVAT credit relating to 16 specified services under Rule 6(5) of the CENVAT Credit Rules, 2004.
The appellant submitted that the notification only prohibited availment of CENVAT credit on inputs and input services used for providing the taxable services specified in the notification. It contended that Rule 6(5) of the CENVAT Credit Rules, which permitted full credit on specified common input services, was omitted with effect from 1 April 2011. According to the appellant, the credit utilised during the disputed period had accumulated as on 31 March 2011, and once validly availed, there was no restriction on its utilisation. The Commissioner rejected these submissions and confirmed the demand.
