2024 (1) TMI 249 - AT - Service Tax

Exemption from Service Tax - services provided to International Finance Corporations - exempt under N/N. 16/2022-ST. or not - extended period of limitation - CENVAT Credit - input service or not - reimbursement of share of common expenses - renting of immovable property service - insurance service. Exemption from Service Tax - services provided to International Finance Corporations - exempt under N/N. 16/2022-ST. or not - extended period of limitation - HELD THAT - The identical issue has been examined in the case of M/S AC NIELSON ORG. MARG PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI-II 2018 (2) TMI 153 - CESTAT MUMBAI where it was held that the exemption to United Nations would include services provided to all institutions working under the United Nations or working under the umbrella of the United Nations - In view above the exemption Notification No. 16/2002-ST would be available in respect of services provided to IFC which is the part of United Nations. The demand of this count therefore cannot survive and same is set aside - part of the demand of Service Tax relating to the period 01.4.2012 to 31.3.2015 is also not sustainable on the ground of limitation as the issue in dispute were earlier agitated by revenue in the earlier show cause notices as well - entire demand is also not sustainable on the ground of the limitation and on merit. CENVAT Credit - input service or not - reimbursement of share of common expenses - HELD THAT - A perusal of the invoices shows that the DTTIPL has discharge service tax at the rate of 12% on the entire amount of cost sharing. From the description all the services provided by DTTPIL it is apparent that same would be in the nature of management of consultant services and the credit of same would be admissible to the appellant - The document issued by DTTIPL is not in the nature of the cost sharing document but either proper invoices issued by registered service provider. It may be an arrangement between the appellant and DTTIPL that the value of the said service would be based on the actual case incurred by DTTIPL but from the description given by the appellant about the service provided by the membership of DTTPIL. It would be clear that it is not mere sharing of cost. CENVAT Credit - renting of immovable property service in respect of the invoices of M/s Sabien Trusts for office No. 202 Heritage Ashram Road Ahmedabad - rent invoices of Mr. Raj Bhikhubhai Shah for office No.602 Heritage Ashram Road Ahmedabad - HELD THAT - The allegations that the premises were being used by C C Chokshi are not substantiated by impugned order. Moreover the impugned order also does not deny that the said premises were rented to the appellant. In this background the fact that the appellants were using the said premises cannot be doubted. In this background the defect in the invoice can only be treated as a procedural lapse which cannot came in way by eligibility of Cenvat Credit. The Cenvat Credit in respect of the office No. 202 is therefore admissible to the appellant - As regard Office No. 602 it is seen that the appellant have admitted that they were not the sole users of said premises. The said premises were also being used by DTTIL along with the appellant. In this background there are no merit in the appellant s claim that they are entitled to the Cenvat Credit of the entire amount of service Tax paid. CENVAT Credit - input services - insurance services - HELD THAT - It is not disputed by the revenue that the appellant are using the said premises and it is also not disputed that the appellant have installed equipment in the said premises. With these circumstance the Cenvat Credit of insurance would be admissible to the appellants. As regard the use of the said office by M/s C C Chokshi Chartered Accountant is concerned revenue has failed to provide any proof to substantiate its claim. In view of the above the benefit of Cenvat Credit on insurance services cannot be denied. Appeal allowed in part.

Summary

Issues Involved:
1. Exemption of services provided to International Finance Corporation (IFC).
2. Invocation of extended period of limitation.
3. Availment of Cenvat credit for reimbursement of common expenses.
4. Availment of Cenvat credit on renting of immovable property service.
5. Availment of Cenvat credit on insurance services.

Summary:

1. Exemption of Services Provided to International Finance Corporation (IFC):
The appellant argued that services provided to IFC are exempt under Notification No. 16/2022-ST, relying on the Tribunal's decision in Nelson Org Mark Pvt. Ltd. The Tribunal observed that IFC, as part of the United Nations, falls under the exemption provided by Notification No. 16/2002-ST. The Tribunal held that services provided to IFC are exempt from service tax, setting aside the demand on this count.

2. Invocation of Extended Period of Limitation:
The appellant contested the invocation of the extended period of limitation, citing that similar issues had been previously adjudicated. The Tribunal referenced the Supreme Court's decision in Nizam Sugar Factory, which states that facts known to authorities in earlier show cause notices cannot be considered suppression in subsequent notices. The Tribunal found merit in the appellant's argument, ruling that the demand for the period 01.04.2012 to 31.03.2015 is unsustainable on the grounds of limitation.

3. Availment of Cenvat Credit for Reimbursement of Common Expenses:
The appellant claimed Cenvat credit on invoices issued by DTTIPL for shared common expenses. The revenue argued that DTTIPL was not registered for providing taxable services. The Tribunal noted that the expenses were essential for providing output services and that DTTIPL had discharged service tax on the entire amount. The Tribunal concluded that the services provided were not merely cost-sharing but were in the nature of management consultancy services, making the credit admissible.

4. Availment of Cenvat Credit on Renting of Immovable Property Service:
The appellant claimed Cenvat credit for rent paid for office spaces. The revenue denied credit on grounds of non-registration and shared use of premises. The Tribunal found that the denial of credit for office No. 202 was based on procedural lapses and was therefore admissible. For office No. 602, the Tribunal ruled that credit should be proportionate to the appellant's use of the premises and remanded the matter to ascertain the exact proportion.

5. Availment of Cenvat Credit on Insurance Services:
The appellant claimed Cenvat credit for insurance services for equipment and materials in their office premises. The revenue denied credit on grounds of non-registration and shared use of premises. The Tribunal held that registration of premises is not necessary for availing Cenvat credit and found no evidence to support the revenue's claim of shared use. The Tribunal ruled that the credit for insurance services is admissible.

Conclusion:
The appeals were partially allowed, with the Tribunal setting aside demands on several counts and remanding specific issues for further determination. The judgment emphasized the importance of procedural compliance and the applicability of exemptions under existing notifications.