Tribunal grants Cenvat credit for capital goods used in mall construction

The Tribunal allowed the appellant's appeal, granting Cenvat credit on capital goods used in constructing a shopping mall for renting immovable property services. Despite a procedural error in treating litter bins as capital goods, the Tribunal permitted the credit on the bins as inputs for services. The appellant successfully argued that the capital goods were directly used for providing output services, leading to the allowance of the credit.

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Issues:
- Admissibility of Cenvat credit on capital goods used in construction of a shopping mall for renting of immovable property services.
- Admissibility of credit on litter bins used for maintaining cleanliness in the mall.

Analysis:
1. Admissibility of Cenvat Credit on Capital Goods:
The case involved the appellant constructing a shopping mall and using various imported capital goods for the construction. The appellant also claimed credit on litter bins used for maintaining cleanliness in the mall. The department contended that as the appellant provided renting of immovable property services, the credit on capital goods used for construction should be denied. The appellant argued that the credit on litter bins, although mistakenly taken as capital goods, was used as inputs for output services. The Tribunal referred to previous judgments like City Centre Mall Nashik Pvt. Ltd. and M/s Deepak Fertilizers and Petrochemicals Corporation Ltd. where it was held that credit on capital goods used for construction of buildings rented out is not admissible. However, in the present case, the Tribunal allowed the Cenvat credit on capital goods used in the construction of the mall as they were directly used for providing output services of renting immovable property. The appellant was granted the credit on capital goods.

2. Admissibility of Credit on Litter Bins:
Regarding the credit on litter bins, the Tribunal acknowledged that the item did not qualify as capital goods but was used as an input. The appellant mistakenly treated the litter bins as capital goods. The Tribunal deemed this as a procedural lapse and allowed the credit under the head of inputs. The Tribunal emphasized that even though the litter bins were not capital goods, they were used as inputs for providing output services. Consequently, the appellant was granted the credit for the litter bins.

In conclusion, the Tribunal allowed the appeal, granting the appellant the Cenvat credit on capital goods used in the construction of the mall for renting immovable property services. Additionally, the credit on litter bins, although mistakenly treated as capital goods, was allowed as inputs for output services. The Tribunal highlighted that the procedural lapse in treating the litter bins as capital goods did not warrant denial of credit.

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