2019 (5) TMI 1843 - AT - Service Tax

CENVAT Credit - input services - Renting of Immovable Property Services - credit on the ground that payment of service tax had been made in the name of M/s TTSSK, who was not the service provider; that the documents on the strength of which the credit had been availed were not in the form of invoice, bill or challan issued by the service provider, as required under Rule 9 (1) (f) of the Cenvat Credit Rules, 2004 - HELD THAT - The service tax amount in question was actually paid by the appellant and the same was deposited into the Central Government account in the name of the original owner M/s TTSSK. The department in this case, has not disputed the fact that other than the appellant, anybody else has availed the Cenvat credit of service tax paid on the taxable service. The learned Adjudicating Authority has acknowledged the fact regarding deduction of the service tax amount from the lease rent paid to the bank and deposit of the same in the Government exchequer by the appellant. Further, the challan evidencing payment of service tax has also been recognized in the Cenvat statute as the proper and valid document. Even if the service tax paid document does not contain the requisite particulars, the competent authority under the statute was empowered to condone such discrepancy and allow the Cenvat credit to the assessee. But such discretion vested in the Cenvat statute has not been exercised by the jurisdictional service tax authorities. Perusal of the case records reveals that in this case, the appellant had deposited the service tax on the taxable service and also accounted for the same in its books of accounts. Thus, under such circumstances, denial of Cenvat benefit to the appellant cannot be considered as legal and proper. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Cenvat credit eligibility on service tax paid for Renting of Immovable Property Service.

Analysis:
The appellant, engaged in manufacturing excisable goods, availed Cenvat credit on service tax paid for renting immovable property. The Service Tax Department found the property leased by a bank to the appellant, leading to a show cause notice for irregular Cenvat credit availed. The impugned order disallowed the credit, directing payment of disallowed amount with interest and imposing a penalty. The appellant contended entitlement to credit as a manufacturer registered with the Central Excise Department, arguing that the challan used for availing credit was a prescribed document under Cenvat rules. The Revenue supported the impugned order's findings.

The Tribunal noted the appellant's payment of service tax on the rented property and deposit into the Government account, without dispute on credit availed solely by the appellant. Acknowledging the appellant's compliance, the Tribunal highlighted the authority's power to allow credit despite discrepancies in the service tax payment document. Since the appellant paid and accounted for the service tax, denial of Cenvat benefit was deemed unjustified. Consequently, the impugned order was set aside, allowing the appeal in favor of the appellant.