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TMI Blog2024 (10) TMI 1404X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2016 appellant had utilized the entire cenvat credit of Rs.2,51,02,850/- towards payment of service tax on output service. Service Tax Law does not provide for levy of service tax on the flats or buildings constructed for which Occupancy Certificate is obtained. Therefore, carpet area of 21,010 square feet constructed by the appellant was not liable to levy of service tax. Revenue has invoked Rule 6 of Cenvat Credit Rules which provides for circumstances where cenvat credit is admissible or not admissible depending on taxability or otherwise of output service. It is clear from the ruling by Hon ble Gujarat High Court in the case of Principal Commissioner vs. Alembic Ltd. [ 2019 (7) TMI 908 - GUJARAT HIGH COURT] that after obtaining Occupa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortionable or attributable to unsold carpet area should be recovered from the appellant. Therefore, a show cause notice dated 18.10.2018 was issued to the appellant. It was stated in the said show cause notice that out of the cenvat credit of Rs.2,51,02,850/- availed and utilized by the appellant for total saleable carpet area of 2,10,640 square feet, appellant would not be paying any service tax on 21,010 square feet carpet area and, therefore, the appellant should not be eligible for cenvat credit of Rs.25,03,849/-. Therefore, by invoking proviso to subsection (1) of Section 73 of Finance Act, 1994, for extended period of limitation read with the provisions of Rule 6 and Rule 14 of Cenvat Credit Rules, appellant was called upon to show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provide for the appellant to wait to take cenvat credit of input services till the output services sold to the service recipient and that the appellant can take the cenvat credit of service tax paid on input services immediately after the day on which input service invoice is received and that only Rule 11 of Cenvat Credit Rules provides that when the credit is availed at the earlier instance and subsequently when the output service becomes non-taxable, then at a later point, the availed cenvat credit need not be recovered as provided by sub-rule (4) of Rule 11. He has further submitted that on harmonious reading of Rule 3, Rule 6 and Rule 11 of Cenvat Credit Rules, 2004, it is clear that the entitlement to cenvat credit is to be examined o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- towards payment of service tax on output service. I also note that Service Tax Law does not provide for levy of service tax on the flats or buildings constructed for which Occupancy Certificate is obtained. Therefore, carpet area of 21,010 square feet constructed by the appellant was not liable to levy of service tax. Revenue has invoked Rule 6 of Cenvat Credit Rules which provides for circumstances where cenvat credit is admissible or not admissible depending on taxability or otherwise of output service. I note that learned counsel for the appellant has relied on the ruling by Hon ble Gujarat High Court in the case of Principal Commissioner vs. Alembic Ltd. (supra). For the sake of ready reference, I reproduce below para 16, 17 and 18 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not avail the Cenvat credit in respect of the services received after obtaining the completion certificate in respect of exempted service or avail proportionate credit attributed to the taxable output service. Therefore, Rule 6 has application for the period after obtaining the completion certificate. Rule 11(1), (2) and (3) of the Rules applicable to provision for manufactured goods to hold that in case of service becomes exempted at a later stage, there is no such provision in respect of the service. The only provision for the service is provided under sub-rule (4) of Rule 11 of the Rules which reads as under : 11(4). A person provider of output service shall be required to pay an amount equivalent to the CENVAT credit, if any, taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portion of the property was converted into immovable property on account of receipt of completion certificate and on which no service tax would be paid in future. 18. The Tribunal therefore, rightly held that once the respondent are not required to reverse any credit availed by them on valid input services availed during the period 2010 till obtaining of completion certificate, the said amounts reversed by them under protest cannot be retained by the revenue authorities and have to be refunded to the respondent. It is clear from the ruling by Hon ble Gujarat High Court in the above stated case that after obtaining Occupancy Certificate in respect of unsold carpet area for which no service tax will be leviable, cenvat credit already availed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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