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TMI Blog2020 (4) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that the input services in question were received by the appellant before 1 April, 2011 in the grounds of appeal also. The appellant has specifically come out with a case that the CENVAT Credit availed by the appellant for the period 2011-12 pertains to input services received by the appellant prior to 1 April, 2011. In this connection, the relevant pages of the CENVAT Register for the period 2011-12 have also been enclosed - The Commissioner has not examined this aspect and has merely observed that in view of the amendment made in the definition of input service with effect from 1 April, 2011, the appellant would not be entitled to avail CENVAT Credit. It clearly transpires from the reply filed by the appellant as also from the documents enclosed in the appeal that even though the period in dispute may be from 1 April, 2011 to 31 March, 2012, but the input services were received by the appellant prior to 1 April, 2011. The clarification contained in the Circular dated 29 April, 2011, on which reliance has been placed states that The credit on such service shall be available if its provision had been completed before 01.04.2011. Thus, CENVAT Credit could not hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that the appellant was not entitled to avail CENVAT Credit on inputs, input services and capital goods used in the construction of the immovable property. The conclusions of the Commissioner are reproduced below:- 22.7 I find that the inputs, input services capital goods on which CENVAT Credit has been availed by the noticee, have been used in respect of the erection or construction of the immovable property of the noticee. It is the right to use the immovable property which is made leviable to service tax under Renting of Immovable Property Services . I agree that an immovable property is neither subjected to Central Excise Duty nor to Service Tax. Since immovable property is neither a service nor goods , input credit cannot be taken against immovable property. I therefore conclude that the noticee are not eligible to avail the CENVAT Credit of inputs, input services capital goods used for the immovable property and hence the CENVAT credit so availed by the Noticee as detailed in the impugned SCNs is required to be disallowed to them in terms of Rule 14 of the CENVAT Credit Rules, 2004. Xxxxxxxxxxxxxxxxxxxxxxxx 22.9 The immovable property for which the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g out of the premises does not automatically follow from the construction of the building. (emphasis supplied) 6. The Commissioner also noted the amendment that was made by Notification dated 1 March, 2011 that was to be effective from 1 April, 2011 in the definition of input and input services and concluded that for this reason also the appellant would not be entitled to claim CENVAT Credit. 7. Shri B.L. Narasimhan, learned Counsel appearing for the appellant submitted that the appellant had used various inputs, input services and capital goods for the construction of a commercial Mall and these inputs, input services and capital goods have, therefore, been used by the appellant for the provision of its output service, namely RIP since without these inputs, input services and capital goods, the appellant would not have been able to construct the Mall and rent it out for commercial purposes. Learned Counsel, therefore, submitted that the inputs, input services and capital goods used by the appellant have a direct nexus with the provision of output service and CENVAT Credit was correctly availed by the appellant. In support of this submission, learned Counsel placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service had been provided before 1 April, 2011. 9. Dr. Radhe Tallo learned Authorised Representative of the Department has, however, supported the impugned order and has submitted that the findings recorded therein are in conformity with the provisions of the 2004 Rules and do not call for any interference in this appeal. 10. The submissions advanced by learned Counsel for the appellant and the learned Authorised Representative of the Department have been considered. 11. The issue that arises for consideration in this appeal is as to whether the appellant was entitled to avail CENVAT Credit on inputs, input services and capital goods used in the construction of the Hall for providing RIP service. 12. In order to appreciate the issue, it would be appropriate to refer to the relevant provisions of the 2004 Rules. 13. Capital goods , inputs and input services have been defined in sub-clauses (a), (k) and (l) respectively of rule 2 and are reproduced below:- (a) capital goods means:- (A) the following goods, namely:- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 grinding wheels and the like, and parts t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and clearance of final products upto the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; 14. Rule 3 of the 2004 Rules deals with CENVAT Credit. The portion relevant for the purposes of this appeal provides that a provider of taxable service shall be allowed to take credit to be called CENVAT Credit on any input service by the provider of output service. Sub-rule (4) of rule 3 provides that the CENVAT Credit may be utilized for payment of service tax on any output service. 15. The contention of the appellant is that inputs, input services and capital goods were used by the appellant for the construction of a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as can be seen from the definition given above. Credit of duty paid on inputs is available when the inputs are used for providing an output service . Therefore, there is a need to say that the inputs have been used for providing an output service . In the case of input service , the definition includes input services used by a provider of taxable service for providing an output service. Therefore the definition of input and input service are pari materia as far as the service providers are concerned. That being the position, the decision of the Hon ble High Court of Andhra Pradesh would be applicable to the present case. In that case also, the Hon ble High Court took the view that without use of cement and TMT bars for construction of warehouse assessee could not have provided storage and warehousing service . In this case also, without utilizing the service, mall could not have been constructed and therefore the renting of immovable property would not have been possible. The issue involved is squarely covered by the decision of the Hon ble High Court of Andhra Pradesh. Since the service tax demand itself is not sustainable, the question of imposition of penalty does not arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice, the appellant stated that in view of the clarification dated 29 April, 2011 issued by CBEC, input services received prior to 1 April, 2011 were admissible for CENVAT Credit. It has also been stated that the input services in question were received by the appellant before 1 April, 2011 in the grounds of appeal also. The appellant has specifically come out with a case that the CENVAT Credit availed by the appellant for the period 2011-12 pertains to input services received by the appellant prior to 1 April, 2011. In this connection, the relevant pages of the CENVAT Register for the period 2011-12 have also been enclosed. 22. The Commissioner has not examined this aspect and has merely observed that in view of the amendment made in the definition of input service with effect from 1 April, 2011, the appellant would not be entitled to avail CENVAT Credit. 23. It clearly transpires from the reply filed by the appellant as also from the documents enclosed in the appeal that even though the period in dispute may be from 1 April, 2011 to 31 March, 2012, but the input services were received by the appellant prior to 1 April, 2011. The clarification contained in the Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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