Cenvat credit for real estate agent service used in business property purchase was held admissible despite reliance on an inapplicable circular.

Cenvat credit on service tax paid for real estate agent service used to purchase property for business purposes was held admissible. The denial was based on a CBEC master circular dealing with commercial construction and works contract services, but that circular did not apply to real estate agent service. As the tax was paid on a service connected with the assessee's business activity, credit could not be refused on the basis adopted in the impugned order, and the denial was unsustainable.

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Issues: Whether Cenvat credit of service tax paid on real estate agent service used for purchase of property for business purposes was admissible as input service.

Analysis: The denial of credit was founded on a CBEC master circular dealing with commercial construction services and works contract services. The service in question was real estate agent service, and the circular relied upon did not govern that category. Since the tax had been paid on a service connected with the assessee's business activity, the credit could not be denied on the basis adopted in the impugned order.

Conclusion: The Cenvat credit was admissible and the denial of credit was unsustainable.

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