2018 (4) TMI 842 - AT - Service Tax

CENVAT credit - security agency service - It has been contended by Revenue that renting of immovable property is not a service and thus, security agency service cannot be considered as input service for the purpose of availment of Cenvat benefit - Held that - For providing such taxable service, the appellant had availed the services of the security agency service. Since such service was in relation to providing the taxable output service, service tax paid on such service should be available as Cenvat credit to the appellant in terms of Rule (2) (l) of the Rules - credit allowed. N/N. 24/2007-ST dated 22.05.2007 - denial of benefit on the ground that no documentary evidences were produced to show the actual property tax paid by the appellant for letting out the properties - Held that - Since the onus entirely lies with the appellant to prove entitlement of its claim for the benefit provided under Notification dated 22.05.2007, we are of the view that demand confirmed by the original authority is not improper - considering the submission of the appellant that it can produce the documents before the original authority to show that property tax has been paid and the same should be entitled for abatement, the matter remanded to the original authority for verification of such documents - matter on remand. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Availability of Cenvat credit on service tax paid for security agency service.
2. Benefit of Notification No.24/2007-ST dated 22.05.2007 regarding property tax.
3. Benefit of exemption under Notification No.6/2005-ST dated 01.03.2005.

Analysis:
1. The appellant, engaged in providing taxable services, claimed Cenvat credit on service tax paid for security agency service. The Department contended that renting of immovable property is not a service, thus service tax on security agency service should not be available as Cenvat credit. The Tribunal held that renting of immovable property is a taxable service under the Finance Act, 1994. Citing a previous case, the Tribunal dismissed the Department's reliance on a circular, stating that the denial of Cenvat credit was unjustified. The appellant was deemed entitled to the Cenvat benefit on service tax paid for the security agency service.

2. Regarding the benefit of Notification No.24/2007-ST dated 22.05.2007, the appellant had not provided documentary evidence before the original authority. The Tribunal upheld the confirmation of Service Tax demand due to lack of evidence. However, acknowledging the appellant's claim that they can produce the required documents, the matter was remanded to the original authority for verification. The Tribunal directed the original authority to examine whether property tax was paid by the appellant and if it qualified for abatement as per the Notification dated 22.5.2007.

3. The appellant did not press for the benefit of exemption under Notification No.6/2005-ST dated 01.03.2005. The Tribunal upheld the denial of this benefit as per the adjudication order. The appeal was disposed of accordingly, with the Tribunal directing the matter back to the original authority for further verification as per the above decisions.