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2016 (2) TMI 417 - CESTAT MUMBAI

2016 (2) TMI 417 - CESTAT MUMBAI - TMI - Cenvat Credit - Scope of input services utilised to provide Renting of Immovable Property as Output Services - payment of service tax on construction of premises which he intended to put to use as commercial complex and rented out the premises to various entities - Held that:- tax liability on renting of immovable property will not arise unless the immovable property comes into an existence, such immovable property will be in the nature of constructed bui .....

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is directed against Order-in-Original No. 30/ST-II/WLH/2012 dated 06.03.2012. 2. The relevant facts that arise for consideration are appellant herein had availed CENVAT credit of the service tax paid on the input services, goods and used the same for discharging service tax liability under the category of Renting of Immovable Property Services for the period April 2007 to March 2009. Revenue authorities were of the view that the appellant could not avail CENVAT credit on such input services and .....

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on limitation. The adjudicating authority after following due process of law rejected the contentions raised and confirmed the demands along with interest and also imposed penalties by relying the CBEC Circular. 3. Learned Counsel would draw our attention to the facts of the case and submit that the adjudicating authority has erred in confirming the demands raised. It is her submission that the provision of Rule 2(l) Cenvat Credit Rules, 2004, during the relevant period, had envisaged eligibili .....

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on of Elevators and Civil Work by Contractors had discharged the service tax under Works Contract Service and various other services. It is her submission that Commercial Complex so constructed was intended for renting out during the period in question hence the appellant had under bonafide belief availed CENVAT credit and utilized the same for discharge of service tax liability under the category of Renting of Immovable Properties . It is her submission that the reliance by the adjudicating aut .....

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h Court of Gujarat in the case of Mundra Ports & Special Economic Zone Ltd. - 2015 (39) STR 726 (Guj) has reversed the judgement and order of this Tribunal and held that CENVAT credit of duty paid on cement and steel used in construction of new jetties and other commercial buildings are entitled for input credit.4. Learned D.R. on the other hand, reiterates the findings of the adjudicating authority. 5. We have considered the submissions made at length by both sides and perused the records. .....

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ion i.e. April 2007 to March 09, the appellant had correctly availed the CENVAT credit of the service tax paid by the service providers under various categories related to construction of commercial complex or otherwise. The adjudicating authority has relied upon the Boards Circular No. 98/1/2008-ST to confirm the demands raised by the show-cause notice. 6.1 We are not in agreement with the findings recorded by the adjudicating authority for more than one reason. (a) Firstly, it is not disputed .....

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cial complex is constructed and completed in all respects, the same could not be rented out by the appellant is a common sense. In our considered view the reliance placed by the learned Counsel in the judgement of the Tribunal in the case of Navaratna S.G. Highway (supra) will be applicable as in that case, Revenue sought to deny the CENVAT credit of the service tax paid on various input services used for construction of a mall , the Bench (wherein one of us shri M.V. Ravindran was Presiding Off .....

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or is a service, credit is not admissible. As submitted by the learned counsel, the issue which was before the Hon ble High Court of Andhra Pradesh was similar to the present one. The Hon ble High Court of Andhra Pradesh considered the definition of the input and input service and took a view that using cement and TMT bars for construction of warehouse, the CENVAT credit on cement and TMT bars would be admissible. The Honble High Court observed as follows : 6. The only allegation against the as .....

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105)(zza), read with Section 66 of the Finance Act, there shall be levied tax on storage and warehousing services at 12% of the value of taxable service. The service tax payable is determined in accordance with Section 67(4) read with the Service Tax Rules, 1994 made in exercise of the powers under Section 94 of the Finance Act. There is no dispute that every provider of taxable service is entitled to claim CENVAT credit in relation to input service. Rule 2(k) and (l) of the Rules are relevant a .....

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r generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production; all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service; Explanation 1. - The light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2. - Input in .....

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, 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. .....

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VAT Credit Rules, 2002, it may be noted that the said definition of the word input can be divided into three parts namely : (i) specific part (ii) inclusive part (iii) place of use Coming to the specific part, one finds that the word input is defined to mean all goods, except light diesel oil, high speed diesel oil and petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. The crucial requirement, ther .....

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e 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 .....

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