2024 (6) TMI 186 - AT - Service Tax

CENVAT Credit - input and input services for construction of immovable property - denial of credit on the ground of non-payment of service tax or excise duty on the property - HELD THAT - This issue is no more res integra in as much as the jurisdictional Karnataka High Court in the case of COMMISSIONER OF SERVICE TAX VERSUS M/S. GOLFLINKS SOFTWARE PARK PVT LTD. 2022 (12) TMI 472 - KARNATAKA HIGH COURT in a similar set of facts has held that 'While constructing the immovable properties, assessee would have availed various services and paid input tax. The said building is used by the assessee in its business. Therefore, assessee must be entitled to avail the input services to discharge services on various out services.' There are no merit in the impugned order and accordingly, the appeal is allowed.

Summary

Issues involved:
The denial of CENVAT credit to the appellant for inputs and input services used in the construction of immovable property due to non-payment of service tax or excise duty on the property.

Summary:

Issue 1:
The Commissioner denied CENVAT credit to the appellant for inputs and input services used in the construction of immovable property, leading to a demand of Rs.87,02,944/- along with interest and penalties under Section 77 and Section 78 of the Finance Act, 1994.

Details:
The appellant, a service provider in various categories, argued that they regularly filed returns on time and did not suppress any facts to evade service tax. They cited legal precedents to support their claim that they were entitled to CENVAT credit for the construction-related services used.

Issue 2:
The question of whether the appellant is eligible for CENVAT credit on inputs and input services used for constructing immovable property while paying service tax on renting the property.

Details:
The Tribunal referred to a Karnataka High Court judgment that upheld the entitlement of CENVAT credit for input and input services used in constructing commercial complexes for renting immovable properties. Based on this precedent, the Tribunal allowed the appeal, finding no merit in denying the CENVAT credit to the appellant.

In conclusion, the Tribunal allowed the appeal, stating that the appellant was eligible for CENVAT credit on inputs and input services used for construction, in line with legal precedents and the Karnataka High Court judgment.