2016 (11) TMI 142 - AT - Service Tax

Denial of CENVAT credit - input construction services - the decision in the case of Sai Samhita Storages Pvt. Ltd. Vs. CC & CE 2010 (4) TMI 484 - CESTAT, BANGALORE relied upon where it was held that the cenvat credit on input construction services is permissible - Held that - following the decision of the judgment cited, I am of the considered opinion that the appellant is entitled to cenvat credit on input construction services and the impugned order is liable to be set aside and I set aside the impugned order by allowing the appeal of the appellant with consequential relief, if any - CENVAT credit allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of cenvat credit on 'input construction services'.

Analysis:
The appeal was filed against the order passed by the Commissioner (Appeals) rejecting the appellant's appeal and denying cenvat credit on 'input construction services'. The appellant, a real estate developer, had been discharging their service tax liability after availing cenvat credit in accordance with Cenvat Credit Rules. An audit by the Internal Audit Party of the Service Tax Department led to a show-cause notice proposing to deny the cenvat credit on construction-related activities. The Additional Commissioner of Service Tax, through an Order-in-Original, denied the cenvat credit on construction activities and imposed penalties and interest. The appellant then appealed to the Commissioner (Appeals) who partly allowed the appeal but still denied the cenvat credit on 'input construction services', leading to the current appeal before the Tribunal.

The appellant argued that the impugned order was not sustainable as it disregarded decisions by higher judicial fora allowing cenvat credit on 'input construction services'. The appellant relied on various decisions by the Tribunal and High Courts to support their claim. The learned counsel for the appellant highlighted specific cases like Sai Samhita Storages Pvt. Ltd. Vs. CC & CE, M/s. Navaratna S G Highway Properties Pvt. Ltd. Vs. CST, Venus Investments Vs. CCE, Infosys Ltd. Vs. CST, Nirlon Ltd. Vs. CCE, Vamona Developers Pvt. Ltd. V. Comr. Of Cus., and Mundra Ports & Special Economic Zone Ltd. Vs. CCE & ST to emphasize that the issue was settled in favor of allowing cenvat credit on 'input construction services'.

After hearing both parties and considering the cited judgments, the Tribunal held that the appellant was entitled to cenvat credit on 'input construction services'. The Tribunal set aside the impugned order and allowed the appeal of the appellant with consequential relief, if any. The decision was pronounced in open court by the Tribunal member, Shri S.S Garg.