CENVAT credit on construction inputs for renting business held admissible against service tax on immovable property renting

CENVAT credit on inputs and input services used in constructing immovable property employed in the business of renting immovable property was held admissible for discharging service tax on the output renting service. The court relied on an earlier decision on the same issue, which had already accepted the Revenue's position and was not shown to have been challenged. As the assessee used the construction-related services for its renting business, the credit was treated as properly available, and the question of law was answered in favour of the assessee and against the Revenue.

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Issues: Whether CENVAT credit on inputs and input services used in construction of immovable property, and used to discharge service tax on renting of immovable property service, was admissible.

Analysis: The issue had already been decided in a similar matter where credit on inputs and input services used for construction of a commercial complex was held admissible for use against output service of renting of immovable property. The earlier view had been accepted by the Revenue and was not shown to have been challenged. The assessee was engaged in renting immovable property and had used services for construction of the building employed in its business, which supported entitlement to avail the credit.

Conclusion: CENVAT credit was admissible, and the question of law was answered in favour of the assessee and against the Revenue.

Ratio Decidendi: Where input and input service tax is incurred in constructing immovable property used for the business of renting immovable property, CENVAT credit is allowable for discharge of service tax on the output renting service.

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