2013 (3) TMI 19 - AT - Service Tax

Cenvat Credit - applicants took the service of real estate agent for preparing office premises from where they are providing outward service. Revenue is of the view that real estate agent is not integral or directly connected with the activity of output service therefore the input service credit of the same does not qualify under Rule 2(l) of the CENVAT Credit Rules 2004. - held that - As the issue has been decided by the Hon ble High Court of Bombay in Ultra Tech Cement (2010 (10) TMI 13 - BOMBAY HIGH COURT) appellants are entitled for input service credit on real estate agent - Credit allowed - Decided in favor of assessee.

Summary

Issues:
Waiver of pre-deposit of service tax, interest, and penalty demanded on account of availment of inadmissible input service credit on real estate agency service.

Analysis:
The case involved the applicants seeking a waiver of pre-deposit of service tax, interest, and penalty demanded due to the availment of inadmissible input service credit on real estate agency service. The revenue contended that the real estate agent's services were not directly connected with the output service activity, thus disqualifying the input service credit under Rule 2(l) of the CENVAT Credit Rules, 2004. The Hon'ble High Court of Bombay's decision in the Ultra Tech Cement case was crucial in this matter. The High Court had ruled that any service availed by a manufacturer or output service provider in the course of their business activities entitles them to input service credit.

The presiding judge, Ashok Jindal, considered the precedent set by the Hon'ble High Court of Bombay in the Ultra Tech Cement case. Based on this precedent, the judge waived the requirement of pre-deposit and proceeded with the final disposal of the appeals. The judge ultimately set aside the impugned order, allowing the appeal and confirming that the appellants were indeed entitled to input service credit on the services provided by the real estate agent. The appeals and stay applications were thus disposed of in favor of the appellants.

In conclusion, the judgment established that the applicants were entitled to input service credit on the real estate agency service, as per the interpretation of the relevant rules and the precedent set by the Hon'ble High Court of Bombay. The decision emphasized the importance of considering the nature of business activities and the eligibility criteria for input service credit, ultimately leading to a favorable outcome for the appellants in this case.