Appellate Tribunal allows Cenvat Credit on input services for mall construction

Oberoi Mall Ltd. Versus Commissioner of Service Tax, Mumbai -II

Oberoi Mall Ltd. Versus Commissioner of Service Tax, Mumbai -II - 2017 (47) S.T.R. 292 (Tri. - Mumbai) Issues:
- Availment of Cenvat Credit on input services for construction services and maintenance of malls.

Analysis:
The judgment by the Appellate Tribunal CESTAT Mumbai involved appeals against an Order-in-Original regarding the availment of Cenvat Credit on input services for construction and maintenance of malls. The main issue was whether the appellant correctly availed the Cenvat Credit on such input services. The appellants had constructed malls for renting out shops, discharging service tax under 'Renting of Immovable property Services' and availed Cenvat Credit on input services used for construction and maintenance. The Revenue contended that Cenvat Credit on such input services was not permissible.

The Chartered Accountant representing the appellant argued that the issue was covered by a Tribunal judgment and a final order of the bench. On the other hand, the departmental representative cited a High Court judgment holding that availing Cenvat Credit on construction services was incorrect. The Tribunal referred to its previous decision in the case of Navratna S.G. Highway Properties (P) Ltd., where it was held that inputs must be used for providing an output service to avail Cenvat Credit. The Tribunal also mentioned other judgments supporting the appellant's position.

Regarding the High Court judgment cited by the departmental representative, the Tribunal noted that it was a prima facie view on a pre-deposit amount and not a final decision. In contrast, the Tribunal had already taken a final view in previous cases, including the one involving the appellant. Therefore, the impugned orders were set aside, and the appeals were allowed in favor of the appellant. The Tribunal emphasized that the service tax demand was not sustainable, hence no penalty was imposed.