TMI Blog2019 (6) TMI 1596X X X X Extracts X X X X X X X X Extracts X X X X ..... ticorin, appellants had filed ST-3 return without claiming any CENVAT Credit - Thus we are not in position to agree with the conclusion arrived by the Commissioner, that the demand is in respect of the Construction of Commercial or Industrial Complexes in respect of the major portion of demand. For the period after 20.04.2012, when the appellants had shifted and obtained registration under the category of Construction of Commercial or Industrial Complexes in their Centralized Registration at Nagpur, they have not taken any CENVAT Credit. Commissioner has himself rendered the finding that they had taken the disputed credit during the period October 2010 to March 2011. Thus the appellants had not availed any CENVAT Credit during the period after 20.04.2012 - appellants had not taken credit in respect of inputs or input services for rendering the services under the category of Construction of Commercial or Industrial Complexes . The benefit of abatement under Notification No 1/2006-ST is admissible subject to the condition imposed. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 85231 of 2016 - A/86824/2019 - Dated:- 24-6-2019 - Mr. S.K. Mohanty, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adu Electricity Board, Chennai (TNEB). From the ST-3 returns filed by the Appellants it was observed that during the period April 2009 to March 2014, they had paid service tax on total assessable value of ₹ 6,75,98,965/- in respect of these services after availing abatement of 67% of the Gross Value (Notification No 1/2006-ST dated 01.03.2006. It was also observed that they had availed CENVAT Credit of Service Tax paid on input services. 2.3 Since Appellants have availed the CENVAT Credit in respect of the input services, they were not entitled to abatement as provided by Notification No 1/2006-ST and were required to pay Service Tax on the Gross Value of Service provided. Accordingly investigations were undertaken, and show cause notice dated 9.10.2014 was issued to them asking them to show cause as to why- (i) Service Tax of ₹ 51,18,698/- (ST ₹ 49,69,607/- , Ed Cess ₹ 99,391/- and S HS Ed Cess ₹ 49,695/-) should not be demanded and recovered under proviso to Section 73(1) of the Finance Act, 1994; (ii) Interest should not be recovered under Section 75 of the Finance Act, 1994; (iii) Penalty should not be imposed on them under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Undisputedly appellants had taken certain CENVAT Credit in respect of input services provided by them and this has disentitle them from availing the benefit of abatement under Notification No 1/2006-ST; It is not even the case of the revenue that the demand made is in respect of the services provided by the appellant to TNEB Tuticorin. Appellants had provided the Commercial or Industrial Construction Services from their various premises located pan India; The claim that the credit was not carried forward etc is irrelevant as the condition of notification is with regards to taking the CENVAT Credit on the inputs/ input services and if the appellants really intended they could have reversed the credit immediately. Not carrying forward the credit would not amount to actual reversal to make the appellants entitled to benefit of abatement. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of argument of appeal. 4.2 Commissioner has in para 15 of his order recorded the facts in relation to the Centralized Registration of Appellants as follows: Centralized Registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed 0 0 0 0 0 0 Closing Balance 14324 15354 16384 18241 21232 31562 From the table above it is clear that the appellants have during the period October 2010 to March 2011 taken credit on the inputs and input services to the tune of ₹ 31562/-. 4.4 From the above two referred tables it is quite evident that during the period when the appellants have taken CENVAT credit, the appellants were not registered for providing the Commercial or Industrial Complex Services. Commissioner has in para 20 and 21 of his order recorded as follows: 20 A lot of stress has been laid by the Noticee on the fact that their premises at Tuticorin, where the construction activity was being carried out, was not included in the Centralized Registration at Nagpur at the relevant , that they had separate individual Service Tax Registration under Division Tuticorin for this premise at that time and that from the ST-3 returns filed by them for this premises at Division Tuticori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uitable supports, which do not deform (or) micro concrete for beams columns including cost of all materials, labour, lead, lift head load etc., complete as directed by the engineer at site. 5,24,020 4c Providing micro concrete using Rendroc RG (or equivalent as per manufacturer s specifications. This mixed micro concrete should be placed continuously for an average thickness of 110 mm including cost of all materials, labour, lead, lift head load etc., complete as directed by the engineer at site. 48,69,840 4d Applying one coat of polymer modified Acrylic Emulsion (Nitro Bond AR or equivalent) in columns, beams etc., including cost of all materials, labour, lead, lift etc., complete as directed by the engineer at site. 84,710 5a Applying one coat of DEKGUARD s (or) equivalent by spraying to the concrete surface to be carried out as per manufacturers specifications in columns, beams etc., including cost of all materials, labour, lead, lift etc., complete as directed by the engineer at site. 1,07,95,600 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that appellants had not taken credit in respect of inputs or input services for rendering the services under the category of Construction of Commercial or Industrial Complexes . The benefit of abatement under Notification No 1/2006-ST is admissible subject to the condition as below: Provided that this notification shall not apply in cases where, - (i) the CENVAT credit of duty on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has been taken under the provisions of the CENVAT Credit Rules, 2004; or (ii) the service provider has availed the benefit under the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2003-Service Tax, dated the 20th June, 2003 [G.S.R. 503 (E), dated the 20th June, 2003] . Since the appellants have not taken any credit in the respect of the inputs or input services used for providing the taxable services under the category of Construction of Commercial or Industrial Complexes the benefit of the abatement provided by the notification cannot be denied to them. We also find that similar view has been expressed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices 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 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. It can be seen from the above reproduced sub-rule, that input services includes the services used in relation to setting up, modernization, renovation of premises of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned 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 or for any other purpose used by a provider of taxable service for providing an output service are eligible for Cenvat credit. It is not in dispute that the appellant is a taxable service provider on port under the cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract 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 Hon ble High Court of Gujarat the issue of availment of Cenvat credit on the input services which are used for bringing into existence of immovable property are also eligible for availment of Cenvat credit. 5.5 In the case of Bharat Heavy Electrical Ltd. v. CCE, Nagpur - 2014 (34) S.T.R. 430 (Tri.-Mum.), the Tribunal had occasion to analyse a similar issue with regard to availability of abatement under the Notification No. 1/2006-S.T. The Tribunal observed as under :- 4.2 A plain reading of the Not ..... 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