2018 (5) TMI 562 - AT - Service Tax

CENVAT credit - input service , prior to amendment of Rule 2(l) of the rules - retail Mall was utilised for providing the taxable services of renting of immovable property - Held that - Since, the appellant has taken the credit prior to 1.4.2011 and the Mall was also completed before 2011, denial of Cenvat benefit, in our considered opinion, cannot be sustained. Tribunal in the case of Navratna S.G. Highway Prop. Pvt. Ltd. Vs. CST, Ahmedabad 2012 (7) TMI 316 - CESTAT, AHMEDABAD has held that the goods and services used for construction of warehouse, which is further used for providing the output service should be available for the Cenvat benefit. Since, there is dispute about the period of taking Cenvat credit, the matter should go back to the original authority for ascertaining the period, when the Cenvat credit was taken by the appellant in its Cenvat account - appeal allowed by way of remand.

Summary

Issues:
Interpretation of Rule 3 of the Cenvat Credit Rules, 2004 regarding eligibility for Cenvat credit on disputed services.
Applicability of the amended definition of input service from 1.4.2011 on the case.
Verification of the period when Cenvat credit was actually taken by the appellant.

Analysis:
The appeal concerned the eligibility of a service provider to avail Cenvat credit on disputed services used in constructing a retail Mall. The appellant contended that the credit was availed before the amendment of Rule 2(l) of the Cenvat Credit Rules, 2004, which restricted certain services from being considered as input services. The appellant argued that since the construction of the Mall was completed before the effective date of the amendment, the credit should be allowed. The Tribunal noted that Rule 3 enables service providers to take credit on input services, and the disputed services qualified as input services before the amendment. The Tribunal emphasized that once credit is properly taken, its utilization cannot be questioned based on subsequent amendments. The appellant's claim was supported by a precedent where goods and services used for construction were considered eligible for Cenvat benefit if used for providing output services.

Regarding the applicability of the amended definition of input service from 1.4.2011, the Tribunal observed that there was a dispute about the period when the Cenvat credit was actually taken. As the original authority had held that the credit was taken after the amendment, the Tribunal decided to remand the matter for verifying the period of credit availed. If it is confirmed that the credit was taken before 1.4.2011, the appellant should be allowed the benefit of Cenvat credit. The Tribunal emphasized the importance of granting the appellant a personal hearing during the fresh adjudication.

In conclusion, the Tribunal set aside the impugned order and remanded the matter to the original authority for reevaluation in line with the observations made. The appeal was allowed by way of remand, ensuring due process and consideration of the appellant's contentions regarding the timing of Cenvat credit availed.