TMI Blog2015 (6) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... used by the appellant in the course of their manufacturing activity and output services may be utilized for the payment of service tax liability on the service of renting of immovable property. If the factory itself is located in a rented premises, then perhaps the nexus could be there but in the present case we are of the view that input credit cannot be utilized for paying service tax liability on the renting of immovable property service provided in Mumbai. Ld AR has correctly placed reliance on the Larger bench decision in the case of Telco Equipment (supra) holding that there must be semblance integral connection between the input service and the manufacturing/output service. If some information is available in various reports a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ₹ 54,44,777/- for the period 2008-09 to 2011-12, ordering recovery of interest, imposing equivalent penalty. Miscellaneous application is also filed by the appellant praying for permission to re-credit Cenvat of ₹ 54,44,777/- which was deposited by them in cash as ordered by the Tribunal in stay order No. S/1560/14/CSTB/C-I dated 19.08.2014. 2. During audit it was noticed that the appellants who are a manufacturer based in Pune availed credit of input services such as Repairs Maintenance, Manpower, CHA, Sales promotion, Accounting, Auditing and Financing, Security Charges etc. and utilized the said credit for discharging the service tax liability on the amount received for renting Immovable property situated in Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regation of input service utilized in manufacture or to provide output services. 4.1 The next contention of the learned Counsel is that the demand is barred by limitation as the fact of the transaction of renting of immovable property was disclosed in the financial statement as other income and hence there is no suppression of facts because their unit had been audited and records seen. 4.2 He argues that the service of renting is provided outside the jurisdiction of the Commissionerate and therefore, utilization of CENVAT Credit has no significance. Even if it was utilized wrongly, the maximum the department can ask is to restore the credit which was utilized wrongly. 4.3 He also referred to para 18 of the adjudication order in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of their manufacturing activity and output services may be utilized for the payment of service tax liability on the service of renting of immovable property. The judgement relied upon by the learned Counsel holds that there is a common pool of CENVAT Credit for manufacturing and service activity and there is no requirement to maintain separate accounts for use of credit for manufacturing and for output services. The issue in hand is somewhat different both on a factual matrix as well as on appreciation of law. While we do agree that there is no requirement of maintaining separate accounts for input services to be used for manufacturing and output services, our considered view is that the basic requirement of nexus between input a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilized for paying tax on the renting of property service. It is clear that the input service on which the credit was taken were mostly directly related to the manufacturing activities at Pune. And had no connection with the service of renting of property. Therefore, there is no logic in the argument that credit on such input services can be used for paying the service tax liability on the renting of property in Mumbai. The reliance placed on other judgements such as Lakshmi Technology Engg. Ind. Ltd. (supra) are in a different context. We can understand if the factory itself is located in a rented premises, then perhaps the nexus could be there but in the present case we are of the view that input credit cannot be utilized for paying serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to know each and every declaration made outside the Central Excise and Service Tax law. Even if the financial report is available to the audit, the same is meaningless in the sense that it does not indicate that input service tax credit is utilized to pay the tax liability on such renting of property. Therefore, we reject the argument of the appellant. 9. However, we do agree with the prayer in the miscellaneous application that if the credit is not available for paying service tax liability on the renting of property service, there is no bar on utilizing the same credit for manufacturing/other output services at Pune. As the appellant have already paid the amount of ₹ 54,44,777/- which is due to the department, they are allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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