2014 (1) TMI 1511 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Denail of CENVAT Credit - Credit taken on construction service - Held that - The service considered for the purpose of denial of service tax credit is construction service - the construction service is one of the services listed in the 26 services on which service tax credit had been taken and was held to be admissible - Therefore appellants have made out a prima facie case and accordingly the requirement for pre-deposit is waived and recovery is stayed during the pendency of the appeal - Following decision of Navaratna S.G. Highway Prop. Pvt. Ltd. vs. CST 2012 (7) TMI 316 - CESTAT AHMEDABAD - Stay granted.

Summary

Issues:
1. Admissibility of input service tax credit for renting of immovable property service.
2. Denial of service tax credit leading to demand confirmation.
3. Pre-deposit requirement based on previous tribunal decisions.
4. Applicability of previous tribunal decisions on service tax credit.

Analysis:

1. The appellant, engaged in renting of immovable property service, utilized input service tax of service tax paid on construction services for the period from October 2008 to March 2009. The denial of such input service tax credit led to the confirmation of the demand for service tax credit amounting to Rs.1,79,582/- along with interest and penalty of Rs.2,000/-. The issue revolved around the admissibility of this input service tax credit.

2. The appellant's authorized representative argued that the appellant had filed written submissions, urging the consideration of the matter. Referring to previous tribunal decisions, the Addl. Commissioner highlighted the requirement for pre-deposit based on stay orders in specific cases. The appellant relied on the decision in the case of Navaratna S.G. Highway Prop. Pvt. Ltd. vs. CST and the High Court decision in the case of Commissioner vs. Sai Samhita Storages Pvt. Ltd. to support the admissibility of the service tax credit.

3. After considering the submissions from both sides, the tribunal analyzed the previous decisions cited by the Addl. Commissioner and the appellant. It was noted that the services considered in the previous cases were different from the services under consideration in the current case. The tribunal observed that the construction service, which was the subject of denial of service tax credit, was one of the services listed in the 26 services for which the credit had been taken and held admissible in the Navaratna S.G. Highway Prop. Pvt. Ltd. decision. Consequently, the tribunal waived the pre-deposit requirement and stayed the recovery during the appeal's pendency.

4. The tribunal's decision was based on the applicability of previous tribunal decisions and the interpretation of the admissibility of service tax credit for specific services. By analyzing the precedents and the specific services involved, the tribunal found that the appellant's case aligned with the decision of the coordinate bench in Ahmedabad, supporting the admissibility of the service tax credit for construction services. This analysis led to the waiver of the pre-deposit requirement and the stay of recovery during the appeal process.