9911796707
TMI Blog2024 (10) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... either specific exclusion from the definition of terms "input services" or deletion of certain words like "setting up" from the definition of input services or for not having nexus with output service. For ease of reference, the total demand made can be splitted into 5 distinctive issues as under: a) Service Tax availed Rs. 17,01,848/- on Infrastructure Development Service: In this case, based on Infrastructure Development Agreement between appellant and developer dated 25.08.2012, it was alleged by the Department, these services provided by one M/s Sri City Pvt Ltd., were outside the factory premises and the said services of infrastructure development services are in the nature of works contract service/construction service, which falls under the excluded category of input service in terms of Rule 2(l)(A)(a) of Cenvat Credit Rules (CCR) and therefore not an eligible Cenvat Credit and therefore the appellant could not have taken the same. b) Cenvat Credit availed on initial setting up of a factory amounting to Rs. 5,06,401/- (Rs. 4,86,242 + Rs. 13,050 + Rs. 7109): In this case, the appellants have taken credit of Rs. 4,86,242/- in view of the invoice dated 06.06.2014 fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri City Pvt Ltd., (Developer) on lease and the developer, for proper utility of the land and maintenance on day to day basis, provided certain infrastructure facilities like road, power, infrastructure, water, sewerage, landscape etc., to the appellant up to the boundary of the land and collected service tax on services like infrastructure development services, land lease, maintenance and up-keep of roads and landscape etc. The appellants, thereafter, leased out above said land to others and thereafter registered themselves for payment of service tax on their output services namely "renting of immovable property services". It is the taking of service tax paid on various services and utilization by the appellant which has been disputed by the Department in view of the statutory provisions. 5. The Learned Advocate has fairly conceded that they are only contesting confirmation of demand in respect of an amount of Rs. 22,92,293/- out of the total demand confirmed. The first ground taken by him is that in so far as the issue of dis-allowing the credit taken in respect of infrastructure development service by the Department is concerned, it is not in the nature of a "works contract", a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no penalty or interest should have been imposed. 7. On the other hand, Learned AR has reiterated the grounds taken in Order-in-Original, as upheld by the Commissioner (Appeals), and emphasised that since there was no nexus between the input services in respect of which credit has been taken and the output services provided by the appellant, they were not eligible for taking the credit. Therefore, he emphasises that apart from categorical exclusion of certain categories of input services in terms of definition of input service under CCR, the primary criteria is that the input service must have nexus with the provision of output service and since it has been established by the Adjudicating Authority that there was no such nexus, on this ground alone, they are not entitled to take credit. On the issue of limitation, he has mainly contended that appellant has only disclosed consolidated credit amount in ST-3 but did not disclose the nature of service on which the Cenvat Credit has been taken and hence there is ground for invoking extended period. He points out that in the regime of self-assessment, it is obligatory on the part of the assessee to ensure correct availment of credit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices fall under the category of initial setting up of the factory and since word setting up has been omitted, it is not eligible. Therefore, this also traverses beyond the scope of the show cause notice. In so far as amount of Rs. 7,109/- is concerned, the show cause notice has alleged that this also falls within the category of initial setting up of a factory, whereas, the confirmation is on account of services having no nexus with the services provided by the assessee. Hence, this also traverses beyond the scope of the show cause notice and hence not tenable. 12. In so far as credit of Rs. 84,040/- is concerned, which was proposed to be denied on account of the services having no nexus with the output service, the same has been confirmed on account of its having no nexus with the output service provided by the assessee. In this case, the appellant have not been able to prove that these services have nexus with the output service provided by the appellant. Therefore, Adjudicating Authority has rightly confirmed the demand as there is no clear evidence to suggest nexus between input services being used for providing output service in renting of vacant land. In fact, these servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held that it is on the appellant assessee to ensure that they availed correct Cenvat Credit. Similarly, in the case of CC & CE, Ghaziabad Vs M/s Rathi Steel and Power Ltd., [2015 (321) ELT 200 (All.)], the Hon'ble Supreme Court has held that there is a burden cast upon the manufacturer to ensure that Cenvat Credit is correctly claimed by them and proper records are maintained in that regard. Similarly, Tribunal in the case of M/s Woodward Governor India Ltd., Vs CCE, Delhi-IV [2023 (5) TMI 564 CE-Chandigarh] held as follows : 10. Coming to the penalty imposed, the appellants have taken the plea that the Department was well aware of the activity of the appellant and as such extended period cannot be invoked. On the other hand, the Authorized Representative argues that the appellants have obtained separate registration and got separate ground plans approved for trading and manufacturing activities. Thus, they are expected to be aware of the provisions of law regarding the admissibility of credit. While availing CENVAT credit, the appellant should have taken all precautions. We find that Tribunal in the case of Lally Automobiles Ltd. (supra) observed that the appellants have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment's cited, supra, the Department was right in invoking extended period of limitation. 15. In view of the above, the entire demand is decided, issue wise as under : a) Demand of Cenvat Credit of Rs. 17,01,848/- on Infrastructure Development Service: The demand is not sustainable as the show cause notice has proposed to demand this amount on account of the service being in the nature of works contract, which has not been established and therefore the demand is not sustainable. The Original Authority is not correct in relying on grounds for confirming the demand which has not been alleged in the show cause notice. b) Demand of Cenvat Credit of Rs. 4,86,242/-: The demand is not sustainable as the confirmation of demand by the Original Authority on a ground different than the ground in the show cause notice. c) Demand of Cenvat Credit of Rs. 13,050/-: The demand is not sustainable as the confirmation of demand by the Original Authority on a ground different than the ground in the show cause notice. d) Demand of Cenvat Credit of Rs. 7,109/-: The demand is not sustainable as the confirmation of demand by the Original Authority on a ground different than the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
