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2021 (3) TMI 228 - AT - Service TaxCENVAT Credit - input services - construction service - renovation services - insurance service - ground rent - consequential penalty was reduced to ₹ 50,000/- by the Learned Commissioner (Appeals) in the impugned order. CENVAT Credit - input services - construction services - construction activity was undertaken only for setting up an additional warehouse to the factory and that the said construction was directly used for providing output service namely, renting of immovable property service - HELD THAT:- The Co-ordinate Allahabad Bench of the CESTAT in the case of M/s. Upal Developers Pvt. Ltd. [2019 (5) TMI 1532 - CESTAT ALLAHABAD] has also observed that services used for constructing mall which were meant for renting which were discharging service tax liability, the duty paid on the inputs or capital goods or services used for construction of the mall is available as credit - credit is liable to be allowed. CENVAT Credit - input services - renovation services - HELD THAT:- The issue decided in the case of M/S GUJARAT ECO TEXTILE PARK LTD. VERSUS C.C.E. & S.T. SURAT-I [2019 (9) TMI 581 - CESTAT AHMEDABAD] where it was held that During the period 2006-2011, the unit was being set up and laying of pipeline and building wall is certainly part of renovation of premises and thus covered under the definition of input services - the disallowance of CENVAT Credit on this issue also is held to be improper - credit allowed. CENVAT Credit - input services - insurance service - Revenue has denied the credit holding that insurance service does not qualify as input service since it was not used and it did not alter the provision of the output service - HELD THAT:- The Bangalore Bench of the CESTAT in the case of M/s. Meyer Organics Pvt. Ltd. v. The Commissioner of Central Excise, Bengaluru-II [2017 (10) TMI 962 - CESTAT BANGALORE] held that appellants are entitled to the CENVAT Credit on service tax paid on rent of dealer's premises which is nothing but an extension of the factory of the appellant. The appellants are entitled to the CENVAT credit on security services availed for dealer's premises as well as insurance paid for the finished goods stored in the factory premises - it is clear that even the CENVAT Credit on insurance service becomes allowable. CENVAT Credit - input services - Ground rent - HELD THAT:- The development agreement and rental agreement with M/s. Vira Properties (Madras) Pvt. Ltd. is placed on record. The facts borne out of record indicate that the land in question was leased to developer who in turn leased the same back to the owner for which leased rental was collected from the owner-appellant. Prima facie, the assessee who is the owner of the land, has claimed itself to be the lessee of the portion of the same land and paid rent along with applicable Service Tax. Be that as it may, no document evidencing as to how the developer assumed the role of the lessor is there on record nor has it been placed before me. This fact coupled with the crucial fact as to against which output activity did the assessee seek to take the input Service Tax credit has also never been explained - Credit cannot be allowed. Penalty - consequential penalty was reduced to ₹ 50,000/- by the Learned Commissioner (Appeals) in the impugned order - HELD THAT:- The Learned Commissioner (Appeals) has categorically observed that there was no element of fraud, suppression of facts, etc., with an intent to evade tax. The intention as to fraud, suppression of facts, etc., are relevant for the penalty under Rule 15 (3) and hence, the Revenue has not made out any case to rope-in Rule 15 (1) which deals with a different situation altogether - there is no scope to sustain even the reduced penalty and accordingly, the same is directed to be deleted in toto. Appeal allowed in part.
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