2014 (6) TMI 625

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.... Ltd. (MIAPL in short) is registered with the department for providing Airport Services. During the period May, 2006 to Feb, 2007, the appellant paid Service Tax under protest in respect of leasing of part of the premises to various clients. The appellant sought clarification from the department as to the taxability of the activity undertaken by them vide letter dated 31-10-2006. The department vide letter dated 10/11-1-2007 clarified that in terms of Circular No. 80/10/2004-S.T., dated 17-9-2004 Service Tax is not payable on rentals/lease charges charged by the Airport Operator. In pursuant to this clarification, the appellant adjusted the Service Tax paid by them under protest amounting to Rs. 4,17,73,025/- in the month of January, Februa....

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....emitted to the exchequer. However, some of the customers refused to pay Service Tax on the ground that the same is not service or is not taxable and the matter went up to the various High Courts and ultimately the Hon'ble High Court of Delhi vide Order dated 17-7-2012 held that prior to 1-6-2007, renting of immovable property within the Airport area did not attract Service Tax liability. In the meanwhile, the appellant also approached the department to clarify the matter and the department vide letter dated 10/11-1-2007 clarified that the activity does come under Service Tax. Accordingly, they adjusted the Service Tax paid from their pocket (wherever the customers did not pay the Service Tax) against the Service Tax liability on the output ....

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....t they have done is adjustment of excess tax paid by them as provided for under Rule 6(3) of the Service Tax Rules, 1994. Therefore, the action taken by them is correct in law. (ii) As regards the demand of Rs. 1,41,15,163/-, it is a fact that they have taken Cenvat credit on input services in excess to the 20% cap of the Service Tax payable on the output services provided in Rule 6(3)(c) of the Cenvat Credit Rules, 2004. This cap was removed from 1-4-2008. Rule 6(3)(c) of the Cenvat Credit Rules, 2004 only prohibited utilization of Cenvat credit and not taking of the credit per se. Therefore, when the cap was removed, they were eligible to avail all the accumulated Cenvat credit from 1-4-2008 onwards. Therefore, they are not liable....

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....Tax Rules, 1994, there was a provision of adjustment of excess Service Tax paid towards the tax liability for the subsequent period. In the present case, the appellant sought clarification from the department and they were advised by the department that they are not liable to pay Service Tax on renting/leasing the premises in the Airport. The appellant adjusted the excess Service Tax paid by them against the tax liability during January - March, 2007. The action taken by them was strictly in accordance with the provisions of said Rule and, therefore, we find that the demand towards such adjustment of credit in the impugned order is not sustainable in law. The only fact that needs to be verified is whether the amount adjusted is the amount o....