TMI Blog2021 (3) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an immovable property as input service credit which, according to the Revenue, was not used for providing any output service i.e., renting of immovable property. It has also been observed in the Show Cause Notice that the immovable property was let out only after completion of the construction activity; that the services related to construction activities such as Commercial or Industrial Construction Service or Works Contract Service, was an input service for the output namely, immovable property, which was neither subjected to Central Excise Duty nor Service Tax; that the input credit of Service Tax could be availed only if the output is a service liable to Service tax or goods liable to Excise Duty and that the above appeared to be inadmissible under Rule 2 (l) of the CENVAT Credit Rules, 2004. Interestingly, the said Show Cause Notice also refers to the earlier Show Cause Notices, viz.: (i) Show Cause Notice No. 617/2010 dated 30.09.2010 issued in file C.No.IV/09/673/2010-STC/Adj covering the period from April 2009 to September 2009; and (ii) Show Cause Notice No. 42/2011 dated 18.03.2011 issued in file C.No.IV/09/166/2009-STC/Adj. covering the period from October 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cause Notice, they had submitted that the same arose out of a development agreement for construction of commercial complex entered into by them with M/s. Vira Properties (Madras) Pvt. Ltd. According to the terms of the said agreement, the land was leased to the developer for construction and the developer could in turn lease back a portion of the constructed premises to the owner/lessor i.e., the appellant herein. In respect of the aforesaid lease, the developer had charged rent along with applicable Service Tax thereon, which was taken as credit by the appellant who is a lessor in discharge of Service Tax liability on the main lease. The assessee thus pleaded that the lease agreement with the developer was an input service to the noticee/lessor which, according to them, was eligible for credit, etc. 3. The Adjudicating Authority, after considering the reply of the assessee, vide Order-in-Original No. 69/2014 dated 26.08.2014, took up the matter for adjudication and proceeded to confirm the demand proposed in the Show Cause Notice mainly on the ground that the CENVAT Credit availed by the assessee, which was proposed to be denied by the Revenue, was used only for the constructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced reliance on the judgement of the Hon ble High Court of Andhra Pradesh in the case of Commissioner of Central Excise, Visakhapatnam-II v. M/s. Sai Sahmita Storages (P) Ltd. reported in 2011 (270) E.L.T 33 (AP) wherein it has been held that the 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 was available as credit. 5.2.2 The Co-ordinate Allahabad Bench of the CESTAT in the case of M/s. Upal Developers Pvt. Ltd. (supra) has also observed as under: 2. The revenue's objection is to availment of Cenvat credit of duty paid on various inputs, capital goods and input services consumed for the construction of the mall on the ground that the construction activity has not discharged any service tax liability and as such the credit cannot be held to be available to the assessee. Accordingly, by way of issuance of a show cause notice dated 17.04.2015 for the period October, 2009 to March, 2014, the demand of duty of ₹ 3.64 crores approximately was proposed to be confirmed against them by denying the said credit. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jarat). As such, any reference to the said decision by the adjudicating authority was not called for. 6. We also find that the said issue stands covered by various decisions of the Tribunal wherein the Judgment of Hon'ble Andhra Pradesh High Court in the case of Commissioner of Central Excise, Visakhapatanam-ii Vs Sai Sahmita Storages (Plausible) Ltd. (supra) stands followed. Reference to the Tribunal's order can be made as Oberoi Mall Ltd. (supra) M/s Laxmi Enterprises (supra). It stands held in the said decisions 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. As such, we held that the credit stand rightly availed by the appellant and utilized for discharge of their service tax liability under the category of 'Renting of Immovable Property'. We accordingly, set aside the impugned order and allow the appeal with consequential relief. 5.3 In view of the above, I do not see any merit in the Revenue s denial of CENVAT Credit and the same is liable to be set aside. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal service, inward transportation of inputs or capital goods and outward transportation up to the place of removal; (prior to 1.7.2012) but excludes services: - (A) Specified in sub-clause (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of Section 65 of the Finance Act (hereinafter referred as specified services), in so far as they are used for- (a)construction of a building or a civil structure or a part thereof; o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit Rules which permits an assessee to keep the goods outside the factory with the permission of the Assistant Commissioner. Since the appellants were not having sufficient space in the factory to store the inputs and the packing material, therefore, they had taken the premises outside the factory and also took the dealers registration only exclusively to the appellants factory and the goods have not been sold or removed to any other person, which fact has not been denied by the Revenue. Further, I also find that though the rent agreement for the godown was in the name of M/s. Meyer Healthcare Pvt. Ltd., which has merged with the appellant and it was their company before amalgamation. Further, I also find that storage is directly connected to the production. Further I find that the appellant has produced the receipt of insurance premium and which shows that the insurance is with regard to the finished products and other property of the appellant in the factory. Further, I also find that the inputs were supplied from the dealers registered premises to the appellant alone as shown by various invoices produced on record. In view of these facts, I am of the considered opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) 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. 8.2 In view of the above, I do not find any justifiable reasons to interfere with the findings of the lower authorities and hence, the findings on this issue in the impugned order are sustained. Accordingly, this issue stands decided against the assessee. 9. The last issue relates to the consequential penalty which was reduced to ₹ 50,000/- by the Learned Commissioner (Appeals) in the impugned order. In the Show Cause Notice, the issuing authority has proposed p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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