2015 (11) TMI 104 - AT - Service Tax

Waiver of pre deposit - CENVAT Credit - whether the appellant would be eligible for Cenvat credit of central excise duty paid on various inputs like steel, cement, glass etc. and various capital goods like lifts etc. and of service tax paid on various input services used in or in relation of the construction of malls - Held that - It is the contractors who have used various inputs like cement, construction steel, glass etc. and various input services which were used by them for providing the service of commercial or industrial construction (construction of malls) to the appellants. The appellants as recipient of the construction service by the contractors could take Cenvat credit of the service tax paid by the contractors as they had used the malls for providing the service of renting of immovable property which is taxable under Section 65 (105) (zzzz). However, the appellants would not be eligible for Cenvat credit of the excise duty paid on various inputs and service tax paid on various input services, as the inputs and input services, in question, having been, used by the appellants contractors who constructed the malls, are not the inputs/input services for the appellants in respect of their output services. Notwithstanding the fact that the appellant have paid service tax on the amount of rent/lease charges received by them by renting/leasing of the space in the malls for commercial purposes, they would not be eligible for Cenvat credit of excise duty paid on various inputs and service tax paid on various input services used by their contractors in or in relation of construction of malls, as these inputs/input services are not the inputs/input services for the appellant in respect of the output services provided by them. - appellants would be eligible for Cenvat credit in respect of inputs, capital goods and input services used in or in relation to providing the CAM services. - these are not the cases for total unconditional waiver and conditions have to be imposed to safeguard the interests of the Revenue - Partial stay granted.

Summary

Issues Involved:
1. Eligibility for Cenvat credit of central excise duty on various inputs and capital goods.
2. Eligibility for Cenvat credit of service tax paid on various input services.
3. Dispute regarding Cenvat credit of Rs. 54,53,290/- due to unavailability of original invoices (specific to EWDPL).
4. Liability to pay service tax of Rs. 54,545/- on reverse charge basis for GTA services received (specific to NMCPL).
5. Limitation period for Cenvat credit demand.

Detailed Analysis:

1. Eligibility for Cenvat Credit of Central Excise Duty on Various Inputs and Capital Goods:
The appellants, who are in the business of setting up and managing shopping centers, had their malls constructed through contractors. The primary issue was whether the appellants were eligible for Cenvat credit on central excise duty paid on inputs like steel, cement, glass, and capital goods like lifts used in the construction of the malls. The Tribunal held that the appellants were not eligible for Cenvat credit on these inputs and capital goods because these were used by the contractors for providing the construction service, not by the appellants directly for their output services. The Tribunal distinguished this case from the precedent set by the Andhra Pradesh High Court in the case of CCE, Visakhapatnam - II vs. Sai Sahmita Storages (P) Ltd., where the storage warehouses were constructed by the assessee themselves.

2. Eligibility for Cenvat Credit of Service Tax Paid on Various Input Services:
The appellants argued that since they paid service tax on the rent received from leasing mall space and on the maintenance and management charges, they should be eligible for Cenvat credit on the service tax paid on input services used in the construction of the malls. However, the Tribunal held that the appellants would not be eligible for Cenvat credit on the service tax paid on input services used by the contractors in the construction of the malls. The Tribunal noted that the contractors, not the appellants, were the ones who used these input services.

3. Dispute Regarding Cenvat Credit of Rs. 54,53,290/- Due to Unavailability of Original Invoices (Specific to EWDPL):
In the case of EWDPL, there was a specific issue regarding the Cenvat credit of Rs. 54,53,290/- due to the unavailability of original invoices. The Tribunal did not provide a detailed analysis on this issue in the order but implied that such matters require thorough examination during the final hearing.

4. Liability to Pay Service Tax of Rs. 54,545/- on Reverse Charge Basis for GTA Services Received (Specific to NMCPL):
For NMCPL, there was a specific dispute regarding the liability to pay service tax amounting to Rs. 54,545/- on reverse charge basis for GTA services received. The Tribunal did not provide a detailed analysis on this issue in the order but implied that such matters require thorough examination during the final hearing.

5. Limitation Period for Cenvat Credit Demand:
The appellants contended that the bulk of the Cenvat credit demand was time-barred, arguing that they had disclosed relevant facts in their ST-3 returns. The Tribunal noted that the issue of limitation is a mixed question of facts and law that requires detailed examination during the final hearing. Therefore, no final view on the plea of time bar was expressed at this stage.

Conclusion:
The Tribunal directed the appellants to make partial pre-deposits to safeguard the interests of the Revenue. Specifically, the amounts to be deposited were Rs. 3 crores by EWDPL, Rs. 4 crores by NMCPL, and Rs. 2.25 crores by NTPBL. Upon compliance, the requirement for pre-deposit of the remaining amounts of Cenvat credit demands, interest, and penalties would be waived, and recovery stayed until the disposal of the appeals. Compliance was to be reported on 08/07/2014.