9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 1111 - AT - Service TaxDenial of CENVAT Credit - Input services used for Commercial Industrial Construction Service (CICS) - Renting of Immoveable Property Service (RIPS) - whether appellant is not eligible for credit as input services have resulted in an immovable property which is neither excisable nor any service tax is payable on the same - penalty under Rule 15(3) of the Cenvat Credit Rules read with Section 78 of the Finance Act, 1994 - Held that - In 2011 the appellant declared their intention of availing Cenvat Credit on input services for discharging the service tax liability on the output service namely Renting of Immovable Property Service. There is no hiding the fact that these services were received over a period of 5 years from 2007 to 2011. And it was only when the construction was ready for renting out they took centralized registration in 2011. In the centralized registration the input service as well as the services to be provided were declared. We find that as held by the Hon ble High Court of Karnataka in the case of mPortal India Wireless Solutions Pvt. Ltd., there is no provision in the Cenvat Credit Rules which imposes a restriction on availment of credit on input services procured before registration is taken. On the apprehension raised of Revenue as to how the verification could have been done in respect of services procured during the previous five years, we find that the appellant had submitted all documents including invoices before issue of show cause notice which enabled the department to make such verification. We may further go on to say that in the show cause notice no doubt has been expressed regarding the actual receipt of the services. As regards the verification of actual use of the input services, we find that the Annexure A to the show cause notice gives details of Cenvat credit availed on inputs and capital goods for the period 1.6.2007 to 31.3.2011 implying that department has conceded that the Cenvat credit was availed for the construction of mall and Renting of Immovable Property Service. Almost the entire credit has been availed on input services which have been used for providing the output service that is Renting of Immoveable Property Service for which there was no restriction under the clause (l) of the definition of input service . The inclusive part of the definition of input service allowed services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service etc. The words setting up were deleted only from 1.4.2011. Therefore the appellant are eligible for the credit in terms of the definition of input service. - credit is held to be admissible and recovery of the same is set aside - Decided in favour of assessee.
Issues Involved:
1. Eligibility for Service Tax Credit on Input Services and Capital Goods. 2. Transfer of Service Tax Credit to Centralized Registration. 3. Verification of Service Tax Credit for Services Procured Over Previous Years. 4. Delay in Availing Service Tax Credit. 5. Applicability of Legal Precedents and Definitions. Issue-wise Detailed Analysis: 1. Eligibility for Service Tax Credit on Input Services and Capital Goods: The appellant, engaged in construction and sale of commercial properties, availed Cenvat Credit on input services and capital goods for constructing a mall used for providing Renting of Immovable Property Service (RIPS). The Revenue contested that the input services were used for construction, which is not excisable, and thus credit is not admissible. The Tribunal referred to the Andhra Pradesh High Court's judgment in Sai Sahmita Storages (P) Ltd., which allowed Cenvat Credit on inputs used for providing taxable services, including construction-related inputs. The Tribunal found that the appellant availed credit on various input services, not on steel or cement, and thus upheld the credit eligibility. 2. Transfer of Service Tax Credit to Centralized Registration: The appellant initially registered for service tax in Mumbai and later obtained centralized registration in Pune in 2011. The Revenue argued that the appellant wrongly transferred accumulated credit to Pune. The Tribunal noted that the appellant took centralized registration before availing the credit and did not avail any credit in Mumbai. The Tribunal found no violation of Rule 10 of the Cenvat Credit Rules and upheld the credit availed at Pune. 3. Verification of Service Tax Credit for Services Procured Over Previous Years: The Revenue raised concerns about verifying the credit for services procured from 2007 to 2011. The Tribunal observed that the appellant submitted all relevant documents before the show cause notice, enabling verification. The Tribunal found no doubt expressed in the show cause notice regarding the receipt of services and concluded that the credit was availed for the construction of the mall and RIPS. 4. Delay in Availing Service Tax Credit: The Revenue argued that the delay in claiming credit was unreasonable. The Tribunal referred to the Apex Court's judgment in Citadel Fine Pharmaceuticals, which held that the reasonableness of delay depends on the facts of each case. The Tribunal noted that the appellant availed credit only after the mall's construction was completed and when it was ready for renting out. The Tribunal found the delay reasonable and upheld the credit. 5. Applicability of Legal Precedents and Definitions: The Tribunal referred to multiple judgments, including mPortal India Wireless Solutions Pvt. Ltd., which held that registration is not a prerequisite for claiming credit. The Tribunal also referred to the definition of 'input service' before and after 1.4.2011, noting that there was no restriction on using input services for construction before the amendment. The Tribunal found that the appellant availed credit on input services used for providing RIPS, which was permissible under the definition of 'input service.' Conclusion: The Tribunal held that the appellant is eligible for the service tax credit on input services and capital goods used for constructing the mall, which is used for providing Renting of Immovable Property Service. The Tribunal set aside the recovery of the credit, interest, and penalty, allowing the appeal. The judgment emphasized adherence to judicial discipline and the applicability of legal precedents in determining the eligibility for Cenvat Credit.
|
