Cenvat credit allowed for service tax on renting immovable property under Rule 2(l) main clause definition

CESTAT Ahmedabad allowed the appeal regarding denial of Cenvat credit for service tax paid on renting of immovable property services. The lower authority had denied the claim based on amended Rule 2(l) of Cenvat Credit Rules, 2004, arguing that renting services fell under "setting up of premises" which was removed from the inclusion clause. CESTAT held that renting of immovable property services used directly for providing output services are covered under the main clause definition of input services, not merely the inclusion clause. The tribunal noted that renting services were not listed in the exclusion clause post-amendment and remained admissible for Cenvat credit, setting aside the demand order.

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Issues Involved:

1. Eligibility to avail Cenvat credit on service tax paid for renting of immovable property services under the amended definition of input services in Rule 2(l) of the Cenvat Credit Rules, 2004.
2. Invocation of extended period under Section 73(1) of the Finance Act, 1994 for demand confirmation.
3. Address discrepancy on invoices for availing Cenvat credit.

Detailed Analysis:

1. Eligibility to Avail Cenvat Credit on Renting of Immovable Property Services:

The primary issue revolves around whether the appellant can avail Cenvat credit for service tax paid on renting of immovable property services despite amendments to the definition of input services under Rule 2(l) of the Cenvat Credit Rules, 2004, effective from 01.04.2011. The appellant argued that the removal of "activities relating to setting up" from the inclusion clause does not affect their eligibility, as renting services are directly used for providing output services. The Tribunal supported this view, stating that services used in or in relation to providing output services are covered under the main clause of the definition of input service. The Tribunal cited several judgments, including Navin Flourine International Ltd. and Roquette Riddhi P. Ltd., reinforcing that renting of immovable property services does not fall under the exclusion clause and thus remains eligible for Cenvat credit.

2. Invocation of Extended Period Under Section 73(1) of the Finance Act, 1994:

The appellant contested the invocation of the extended period for demand confirmation, arguing there was no deliberate suppression of facts or willful misstatement. They maintained that all Cenvat credits were duly reflected in their ST-3 returns, negating any concealment. The Tribunal found merit in this argument, referencing the Apex Court's judgment in Anand Nishikawa Co. Ltd., which supports the appellant's position that the extended period is not applicable in the absence of willful misstatement or suppression of facts.

3. Address Discrepancy on Invoices:

The issue of address discrepancy on invoices was also addressed. The appellant argued that the services were received at their factory, even though the invoices bore the head office address. The Tribunal ruled that as long as the input service was received for the appellant's factory, the credit should not be denied solely based on address discrepancies. This view was supported by previous judgments, including Madhya Pradesh Consultancy Organization Ltd. and Rajendra Kumar and Associates, which established that registration of premises or specific address details on invoices are not prerequisites for availing Cenvat credit.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal, affirming the appellant's eligibility to avail Cenvat credit on all contested grounds. The judgment underscores the interpretation of input services and the conditions under which Cenvat credit is admissible, providing clarity on the application of rules post-amendment.

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