2013 (3) TMI 19 - AT - Service Tax

Precedent applied: Appeal allowed, pre-deposit waived for input service credit entitlement.

The judge, Ashok Jindal, relied on the precedent set by the High Court of Bombay in the Ultra Tech Cement case to waive the pre-deposit requirement and ... Input service credit - real estate agent service - qualification of input service credit under Rule 2(l) of the CENVAT Credit Rules, 2004 - credit for services availed in the course of business of providing output serviceInput service credit - real estate agent service - credit for services availed in the course of business of providing output service - Entitlement to CENVAT credit of input service paid to a real estate agent engaged for procuring office premises used for providing outward services. - HELD THAT: - The Tribunal applied the legal principle laid down by the Hon'ble Bombay High Court in Ultra Tech Cement that any service availed by a manufacturer or output service provider in the course of the activity of business of manufacture or providing output service qualifies for input service credit. On that authoritative basis the Tribunal concluded that real estate agent services procured for preparing office premises from which outward services are provided fall within the ambit of input services eligible for credit. The Tribunal set aside the impugned orders denying credit and proceeded to allow the appeals after waiving the requirement of pre-deposit to enable final disposal.Impugned orders set aside; appellants held entitled to input service credit on real estate agent services and appeals allowed.Final Conclusion: Appeal allowed; denial of input service credit for real estate agent services overturned and appellants granted entitlement to credit; pre-deposit requirement waived and appeals disposed of. Issues:Waiver of pre-deposit of service tax, interest, and penalty demanded on account of availment of inadmissible input service credit on real estate agency service.Analysis:The case involved the applicants seeking a waiver of pre-deposit of service tax, interest, and penalty demanded due to the availment of inadmissible input service credit on real estate agency service. The revenue contended that the real estate agent's services were not directly connected with the output service activity, thus disqualifying the input service credit under Rule 2(l) of the CENVAT Credit Rules, 2004. The Hon'ble High Court of Bombay's decision in the Ultra Tech Cement case was crucial in this matter. The High Court had ruled that any service availed by a manufacturer or output service provider in the course of their business activities entitles them to input service credit.The presiding judge, Ashok Jindal, considered the precedent set by the Hon'ble High Court of Bombay in the Ultra Tech Cement case. Based on this precedent, the judge waived the requirement of pre-deposit and proceeded with the final disposal of the appeals. The judge ultimately set aside the impugned order, allowing the appeal and confirming that the appellants were indeed entitled to input service credit on the services provided by the real estate agent. The appeals and stay applications were thus disposed of in favor of the appellants.In conclusion, the judgment established that the applicants were entitled to input service credit on the real estate agency service, as per the interpretation of the relevant rules and the precedent set by the Hon'ble High Court of Bombay. The decision emphasized the importance of considering the nature of business activities and the eligibility criteria for input service credit, ultimately leading to a favorable outcome for the appellants in this case.