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TMI Blog2018 (3) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... y deposit towards renting of immovable property service along with interest and penalty under various provisions of the Finance Act, 1994. 2. Briefly the facts of the present case are that the appellant is engaged in the business of providing services under storage and warehousing services and renting of immovable property services and they are rendering output services of storage and warehousing till the period of August 2010. The appellant had modernized its premises at Kanjur Marg (E), Mumbai in the year 2008 with a view to let out the same property for commercial use to firms/companies on licence along with various equipments and furnitures. The completion of the modernization/renovation work at the said factory was completed in July 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich had been used in relation to construction of immovable property and, therefore, the same is not admissible; (b) The construction of immovable property and its subsequent renting are independent transactions and, therefore, the credit for construction cannot be allowed; (c) The adjudication authority has placed reliance on the judgment in the case of Bharti Airtel Ltd. vs. CCE Pune 2014-TIOL-1452-HC-MUM-ST; (d) Taking of security deposit is a pre condition for providing service and thus has nexus with the output service. The adjudicating authority while passing the order-in-original has dropped part of the demand to the extent of Rs. 1,31,02,383/- on cenvat credit availed pertaining to (a) input services of brokerage, service manage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clarified that the credit is eligible for input services for renovation/modernization of the premises. He further submitted that all these services which are in dispute in the present appeal have been considered by this Bench of the Tribunal in the case of City Centre Mall Nashik Pvt. Ltd. 2017-TIOL-4322-CESTAT-MUM wherein credit was allowed on various input services used for construction of immovable property which were subsequently rented out. He further submitted that the Commissioner has denied the cenvat credit on the ground that the same is used for construction of immovable property by relying upon the circular dated 4.1.2008 and upon the judgment in the case of Galaxy Mercantiles Ltd. 2013-TIOL-751-HC-ALL-ST and Bharti Airtel Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le intermediate product will be eligible if the intermediate product is used for manufacture of dutiable final product. He also submitted that for cenvat credit availed after 1.4.2011, there are certain services which have been received prior to 1.4.2011 but the credit has been taken post 1.4.2011 and balance services have been received and credit has been taken post 1.4.2011 and he has given the list of services on which credit has been taken after 1.4.2011. He also submitted that demand of service tax on notional interest is not sustainable in law. This issue, according to the learned counsel, has been settled in the case of Magarpatta Township Developers & Construction Co. Ltd. 2015 (37) STR 618 (Tri.-Mumbai) and K. Reheja Corp. Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopers & Construction Co. Ltd. and K. Raheja Corp. Pvt. Ltd. cited supra, wherein the Tribunal has held that notional interest cannot be included in the value and will not be taxable under the category of renting of immovable property services. We also find that the department has accepted the judgment on merits and has not filed appeal against the said judgment. Therefore, we hold that no service tax is chargeable on notional interest and the finding of the learned Commissioner on this is set aside.
8. Therefore, keeping in view our discussion above, we find that the impugned order is not sustainable in law and, therefore, the same is set aside by allowing the appeal of the appellant.
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