2013 (10) TMI 1110 - AT - Service Tax

Denial of CENVAT credit Renting of Immovable Property Service Held that - Following Navaratna S.G. Highway Prop. (P.) Ltd. Vs. CST, Ahmedabad 2012 (7) TMI 316 - CESTAT, AHMEDABAD - Credit of duty paid on inputs is available when the inputs are used for providing an output service . In the case of input service , the definition includes input services used by a provider of taxable service for providing an output service - the entire amount of service tax with interest has been deposited on renting of immovable property service, this is a fit case for waiver of predeposit - Accordingly, there shall be waiver of predeposit of balance dues and stay against recovery during the pendency of appeal Stay granted.

Summary

Issues:
Appeal against demand of service tax on 'renting of immovable property service' and CENVAT credit availed on various input services during construction.

Analysis:
The appeal before the Appellate Tribunal CESTAT Bangalore involved a challenge against the demand of service tax on 'renting of immovable property service' and the issue of CENVAT credit availed on input services during construction. The appellant, represented by a Chartered Accountant, had deposited the entire amount of service tax payable for the renting of immovable property service along with interest before the issuance of the show-cause notice. This fact was also mentioned in the reply to the show-cause notice. However, the Order-in-Original did not take note of this deposit. The appellant relied on a precedent Tribunal decision to support the admissibility of the CENVAT credit on input services.

Upon hearing the arguments, the Tribunal found that the appellant was eligible for the credit based on the precedent Tribunal's decision. Considering this, and the fact that the entire amount of service tax with interest had been deposited for renting of immovable property service, the Tribunal deemed it a fit case for the waiver of predeposit. Consequently, the Tribunal ordered the waiver of predeposit of the balance dues and granted a stay against recovery during the pendency of the appeal.

The Tribunal also noted that the Department had the right to file an application to vacate the stay if the submission regarding the payment of service tax was found to be incorrect. This decision was pronounced and dictated in open court by the presiding judges, Shri B.S.V. Murthy and Shri Ashok Jindal. The case highlighted the importance of compliance with service tax obligations and the admissibility of CENVAT credit based on legal precedents.