2018 (4) TMI 842 - AT - Service Tax

Tax Tribunal allows Cenvat credit for security services but seeks more evidence for other benefits

The Tribunal held that renting of immovable property is a taxable service under the Finance Act, 1994, allowing the appellant to claim Cenvat credit on ... Renting of immovable property service - Cenvat credit as input service - definition of input service under Cenvat Credit Rules, 2004 - Notification No.24/2007 ST abatement for property tax - Notification No.6/2005 ST exemption - TRU Circular ambiguity and non binding effectRenting of immovable property service - Cenvat credit as input service - definition of input service under Cenvat Credit Rules, 2004 - TRU Circular ambiguity and non binding effect - Service Tax paid on security agency service used for providing renting of immovable property service is eligible for Cenvat credit. - HELD THAT: - The Tribunal recorded that renting of immovable property is a taxable service under Section 65(105)(zzzz) of the Finance Act, 1994 and the security agency service was availed in relation to that taxable output service. Consequently, such service falls within the scope of input service as defined in Rule 2(l) of the Cenvat Credit Rules, 2004 and the Service Tax paid thereon is admissible as Cenvat credit. The Tribunal rejected the Department's reliance on the TRU Circular, holding (with reference to the Tribunal's view in Maharashtra Cricket Association) that the Circular is ambiguous and cannot override the statutory definition of input service for denial of credit. [Paras 6]Appellant entitled to Cenvat credit of Service Tax paid on security agency service.Notification No.24/2007 ST abatement for property tax - Claim for abatement under Notification No.24/2007 ST was not accepted by the original authority for lack of documentary proof and requires verification. - HELD THAT: - The adjudicating authority confirmed Service Tax demand because the appellant did not produce documentary evidence before the original authority to establish payment of property tax and entitlement to abatement under Notification No.24/2007 ST. The Tribunal observed that the onus to prove entitlement rests on the appellant but, in view of the appellant's submission that documents can be produced, directed that the original authority should verify the records/documents to ascertain whether property tax was paid and whether abatement is allowable under the Notification. [Paras 7]Matter remitted to the original authority for verification of documents and determination of entitlement to abatement under Notification No.24/2007 ST.Notification No.6/2005 ST exemption - Denial of benefit under Notification No.6/2005 ST was upheld as the appellant did not press the claim. - HELD THAT: - The Tribunal noted that the appellant was not pressing the claim for exemption under Notification No.6/2005 ST dated 01.03.2005 and accordingly sustained the adjudication order insofar as it denied the benefit of that Notification. [Paras 8]Adjudication order upheld with respect to denial of benefit under Notification No.6/2005 ST.Final Conclusion: Appeal allowed in part: Cenvat credit of Service Tax paid on security agency service granted; claim for abatement under Notification No.24/2007 ST remitted to the original authority for verification of documentary proof; denial of Notification No.6/2005 ST benefit upheld. Issues:1. Availability of Cenvat credit on service tax paid for security agency service.2. Benefit of Notification No.24/2007-ST dated 22.05.2007 regarding property tax.3. Benefit of exemption under Notification No.6/2005-ST dated 01.03.2005.Analysis:1. The appellant, engaged in providing taxable services, claimed Cenvat credit on service tax paid for security agency service. The Department contended that renting of immovable property is not a service, thus service tax on security agency service should not be available as Cenvat credit. The Tribunal held that renting of immovable property is a taxable service under the Finance Act, 1994. Citing a previous case, the Tribunal dismissed the Department's reliance on a circular, stating that the denial of Cenvat credit was unjustified. The appellant was deemed entitled to the Cenvat benefit on service tax paid for the security agency service.2. Regarding the benefit of Notification No.24/2007-ST dated 22.05.2007, the appellant had not provided documentary evidence before the original authority. The Tribunal upheld the confirmation of Service Tax demand due to lack of evidence. However, acknowledging the appellant's claim that they can produce the required documents, the matter was remanded to the original authority for verification. The Tribunal directed the original authority to examine whether property tax was paid by the appellant and if it qualified for abatement as per the Notification dated 22.5.2007.3. The appellant did not press for the benefit of exemption under Notification No.6/2005-ST dated 01.03.2005. The Tribunal upheld the denial of this benefit as per the adjudication order. The appeal was disposed of accordingly, with the Tribunal directing the matter back to the original authority for further verification as per the above decisions.