Page 130 - GSTL_11th June 2020_Vol 37_Part 2

216 GST LAW TIMES [ Vol. 37
this intimation of exercising of a particular option is only a procedural one and
such procedural lapse is condonable and denial of substantive right on proce-
dural lapse is unjustified. For this, he relied upon the following decision :-
(i) Cranes & Structural Engineers v. CCE, Bangalore-I [2017 (347) E.L.T.
112 (Tri. - Bang.)]
(ii) Aster Pvt. Ltd. v. CC & CCE, Hyderabad-III [2016 (43) S.T.R 411 (Tri. -
Hyd.)]
4.4 On the point of limitation, the Learned Counsel submitted that the
demand for the period from April, 2008 to March, 2013 is time barred because the
show cause notice No. 101/2013, dated 21-10-2013 was issued for the period
April, 2008 to March, 2012 when the normal period of limitation was one year
and therefore the entire demand is time barred. He also submitted that extended
period cannot be invoked in the present case because the appellant have been
filing the returns regularly and there was a confusion regarding the correct posi-
tion of law during the relevant time.
5. On the other hand, the Learned AR defended the impugned order.
6. After considering the submissions of both sides and perusal of the
material on record, we find that during the period from 1-4-2008 to 30-4-2011, the
appellant was not liable to pay service tax because the accommodation service
and restaurant service became taxable only from 1-5-2011 and no Cenvat credit
reversal was required under Rule 6(3) of the CCR. Further we find that during
this period, there was a dispute that whether the restaurant service and accom-
modation service are subject to tax or not and the Kerala High Court in the case
of Kerala Classified Hotels and Resorts Association and others had held that both res-
taurant service and accommodation service cannot be subjected to service be-
cause they do not fall in the definition of exempted service and therefore the
question of reversal of Cenvat credit does not arise. For the subsequent period
from 1-5-2011 to 30-6-2012, the appellant availed abatement with respect to res-
taurant service and accommodation service as per Notification No. 1/2006-S.T.,
dated. 1-3-2006. During the relevant time, availment of abatement vide Notifica-
tion No. 1/2006-S.T., dated 1-3-2006 cannot be considered as exempted service
for the purpose of reversal of Cenvat credit as per Rule 6 of CCR. Further for the
demand for the period from 1-7-2012 to 31-3-2013, the definition of exempted
service was again changed. The appellant during this time have availed the bene-
fit of abatement with regard to accommodation service as per Sl. No. 6 of the No-
tification No. 26/2012, dated 20-6-2012 which provides that 40% of the value of
accommodation service has been exempted from the levy of service tax on the
condition that credit on input and capital goods used for providing the taxable
service have not been taken under the provisions of CCR. Further we find that
there was no restriction with respect to availment of Cenvat credit on input ser-
vices as per the said notification and the only restriction was with respect to the
availment of Cenvat credit on inputs and capital goods. The appellants are avail-
ing the benefit of abatement with respect to accommodation services under the
Notification which cannot be considered as exempted services. As far as, restau-
rant services are concerned, the appellants are not availing any abatement notifi-
cation. Further we find that as per Rule 2C of Service Tax (Determination of Val-
ue) Rules, 2006, value of service portion involved in supply of food or any other
article of human consumption or any drink in a restaurant has been fixed as 40%
of the total value on the condition that Cenvat credit on inputs classified under
Chapters 1 to 22 of CETA, 1985 are not taken. Further we find that when the stat-
GST LAW TIMES  11th June 2020  130