TMI Blog2018 (1) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... column 2 of the notification - In the case of Bharat Heavy Electrical Ltd. Vs. CCE, Nagpur [2012 (4) TMI 197 - CESTAT, MUMBAI], the Tribunal had occasion to analyse a similar issue with regard to availability of abatement and held that there is no stipulation in the notification that the option to avail/non-avail CENVAT credit has to be exercised uniformly in respect of all the contracts executed by the assessee. It is for the assessee to choose which formulation he wants to follow in a given contract. Demand set aside - appeal allowed - decided in favor of appellant. - ST/40945/2014 - Final Order No.43404/2017 - Dated:- 28-11-2017 - Ms. Sulekha Beevi, Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri Anil Sood, Advocate for the appellant Shri K. P. Muralidharan, AC (AR) for the Respondent. ORDER Per Bench The appellants are running a 4 star hotel and are registered with the Service Tax department w.e.f. 22.05.2008. SCN was issued interalia alleging wrong availment of credit to the tune of ₹ 77,02,444/- and wrong availment of abatement under Notification No. 1/2006-ST dated 01.03.2006 to the tune of ₹ 93,67,353/-. Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the credit. It is also submitted by the Ld. Counsel that w.e.f 01.04.2011 Rule 6 (5) came to be omitted vide Notification No. 3/2011. iii) The second issue is the demand raised on account of availment of Notification No. 1/2006-ST dated 01.03.2006, during the period May 2011 to March 2012, the said notification provides for abatement in the case of services specified in the said Notification. One of the conditions to be fulfilled to be eligible for the abatement is that the appellant cannot avail Cenvat credit of duty on inputs or capital goods or Cenvat credit of service tax on input services used for providing such taxable service. The allegation of the department is that since the appellant has availed cenvat credit of input services, they are not eligible for abatement. It is explained by the Ld. Counsel that the condition in the Notification is that the credit on input services used for providing the output services specified in the Notification are restricted. It was only later by amendment dated 25.04.2011, the Hotel services/Short term accommodation services and Restaurant services came to be included in the above said Notification. The appellant had already availed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per Rule 6 (1) of CCR, the appellant cannot avail input service tax credit in respect of exempted services. Since the short term accommodation services and restaurant services were not taxable till 01.05.2011, these services have to be regarded as exempted output services. Rule 6 provides that service provider cannot avail input credit in case such input services are used for both taxable as well as exempted services unless, the procedures laid in 6 (2) (3) are complied. The appellants have not followed any of the condition in the said Rule. Therefore, the authorities below have rightly disallowed the credit availed on exempted services by the appellants. 3.2 While discharging the service tax on output services of Short term accommodation services and restaurant services, the appellant has availed abatement under Notification No. 1/2006-ST. One of the condition stated therein for availing the benefit of notification is that the assessee shall not take Cenvat credit on inputs, capital goods or input services. Since the appellants have availed credit on input services, they are not eligible for abatement. Therefore, the service tax paid by them by availing abatement is incorrect a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no reason for interpreting the term allow in a narrow and restrictive manner as urged by the Revenue. The said interpretation urged by the Revenue defeats the object and purpose of the Cenvat Credit Rules. Rules cannot be interpreted in such a way so as to make them nullity. 5.2 Similar view was taken by the Tribunal in the case of Tidel Park Ltd. (supra) , the relevant portion of the decision is reproduced as under:- 2. I have heard both sides and find merit in the submission of the assessees that they are entitled to the whole of the credit of the service tax paid on taxable service as specified in 17 specified categories covered by Rule 6(5) as such service is not used exclusively in or in relation to the providing of exempted services. Rule 6(5) is a non obstante clause and therefore completely widens the restriction contained in Rule 6(3)(c). It is not the case of the Revenue that the taxable service on which service tax has been paid is not one of 17 categories specified in Rule 6(5) of Cenvat Credit Rules, 2004. I, therefore, set aside the impugned order by accepting that the assessees are entitled to entire credit, and allow the appeal with consequential re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.01.2008 in as much, the definition of input services during the relevant period does not bar availment of CENVAT credit all input services. In order to appreciate correct position of law, the definition of input services under Rule 2(l) of the CENVAT Credit Rules, 2004 as was during the relevant period of these cases is reproduced: input service means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upt9o 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 ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise of the powers conferred by Section 37 of the Central Excise Act, 1944 with effect from 7-7-2009, the date on which it was notified by the Central Government from the date of the notification. According to learned Counsel for the appellant, this amended definition would apply only to the factory or manufacturer and would not apply to the service provider. According to him, either before the amendment made in the year 2009 or thereafter, the appellant was neither factory nor manufacturer and he has only constructed jetty by use of cement and steel for which he was entitled for input credit as jetty was constructed by the contractor, but the jetty is situated within the port area and the appellant is a service provider. According to the appellant, his case is squarely covered by the judgment of the Division Bench of the Andhra Pradesh High Court in Commissioner of Central Excise, Visakhapatnam-II v. Sai Sahmita Storages (P) Limited, 2011 (270) E.L.T. 33 (A.P.) = 2011 (23) S.T.R. 341 (A.P.) wherein in Paragraph 7, it has been clearly held that a plain reading of the definition of Rule 2(k) would demonstrate that all the goods used in relation to manufacture of final product o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted by the appellant by purchasing iron, cement, grid, etc., which are used in construction of jetty. The contractor has constructed jetty. There are two methods, one is that the appellant would have given entire contract to the contractor for making jetty by giving material on his end and then make the payment, the other method was that the appellant would have provided material to the contractor and labour contract would have been given. The appellant claims that he has provided cement, steel, etc., for which he was entitled for input credit and, therefore, in our opinion, the appellant was entitled for input credit and it cannot be treated that since construction of jetty was exempted, the appellant would not be entitled for input credit. The view taken contrary by the Tribunal deserves to be set aside. It can be seen from the above reproduced paragraphs of the judgment of the Honble High Court of Gujarat the issue avaliment of CENVAT credit on the input services which are used for brining into existence of immovable property are also eligible for availment of CENVAT credit. 5.5 In the case of Bharat Heavy Electrical Ltd. Vs. CCE, Nagpur - 2014 (34) STR 430 (Tri.-M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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