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2018 (10) TMI 163 - AT - Service TaxCash refund of accumulated CENVAT Credit - input services - renting of immovable property service - refund rejected on the ground that the two invoices on which Service Tax was paid claimed to have been issued in the same month - Held that - The two invoices were raised for the rent amount of ₹ 3,93,488/- in the name of each of the co-owners against which Service Tax was paid - Also, on going through the TDS certificate, it is clear that separate invoices are raised by each of the co-owners and Service Tax accordingly paid by each of the co-owner. Therefore, there is no dispute about the admissibility of the CENVAT Credit on the Service Tax paid by the licensor to the extent of the ownership held by each of them in the property as a whole - rejection of refund is unsustainable - appeal allowed - decided in favor of appellant.
Issues:
- Denial of CENVAT Credit on Service Tax paid on renting of immovable property. Analysis: The appeals were filed against Orders-in-Appeal passed by the Principal Additional Director General, DGPM, WRU, Mumbai, concerning the denial of CENVAT Credit on Service Tax paid on renting of immovable property. The appellants, engaged in exporting Information Technology Software Service, sought a refund of accumulated CENVAT Credit under Rule 5 of the CENVAT Credit Rules, 2004. The specific issue revolved around the denial of CENVAT Credit on Service Tax paid on part of the input services, particularly renting of immovable property. The appellant rented an office from two co-owners, Mrs. Payal Jain and Shri Manish Mehta, with a monthly rent of &8377; 7,86,975, which was equally divided between the co-owners. The dispute arose when 50% of the rent amount was considered inadmissible as credit due to two invoices being raised during the same month. The appellant contended that the rent was paid to each co-owner as per the agreement, and TDS was deducted accordingly. They argued that separate invoices raised by each co-owner based on their share should not be deemed as two invoices for the same property in one month. The Revenue, represented by the learned AR, supported the findings of the Commissioner (Appeals). After hearing both sides and examining the records, the main issue for determination was whether the appellants were entitled to claim a cash refund of accumulated CENVAT Credit related to renting of immovable property. The primary reason for the refund rejection was the issuance of two invoices in the same month. However, upon review, it was found that the two invoices were raised for the rent amount in the name of each co-owner, with Service Tax paid accordingly. The TDS certificates confirmed that separate invoices were issued by each co-owner, justifying the payment of Service Tax by each of them. Consequently, there was no dispute regarding the admissibility of CENVAT Credit on the Service Tax paid by the licensor based on the ownership share of each co-owner. Therefore, the rejection of the refund claim on the mentioned ground was deemed unsustainable. Consequently, the impugned orders were set aside, and the appeals were allowed with any consequential relief as per the law.
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