TaxTMI 
TaxTMI 
2015 (6) TMI 584
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....sing equivalent penalty. Miscellaneous application is also filed by the appellant praying for permission to re-credit Cenvat of Rs. 54,44,777/- which was deposited by them in cash as ordered by the Tribunal in stay order No. S/1560/14/CSTB/C-I dated 19.08.2014. 2. During audit it was noticed that the appellants who are a manufacturer based in Pune availed credit of input services such as Repairs & Maintenance, Manpower, CHA, Sales promotion, Accounting, Auditing and Financing, Security Charges etc. and utilized the said credit for discharging the service tax liability on the amount received for renting "Immovable property" situated in Mumbai. The said property in Mumbai is not registered under the Service Tax. Viewing that there is no nexu....
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....n of the learned Counsel is that the demand is barred by limitation as the fact of the transaction of renting of immovable property was disclosed in the financial statement as "other income" and hence there is no suppression of facts because their unit had been audited and records seen. 4.2 He argues that the service of renting is provided outside the jurisdiction of the Commissionerate and therefore, utilization of CENVAT Credit has no significance. Even if it was utilized wrongly, the maximum the department can ask is to restore the credit which was utilized wrongly. 4.3 He also referred to para 18 of the adjudication order in which the Commissioner held that as regards the service tax payable for renting of immovable property for 2011-....
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....on the service of renting of immovable property. The judgement relied upon by the learned Counsel holds that there is a common pool of CENVAT Credit for manufacturing and service activity and there is no requirement to maintain separate accounts for use of credit for manufacturing and for output services. The issue in hand is somewhat different both on a factual matrix as well as on appreciation of law. While we do agree that there is no requirement of maintaining separate accounts for input services to be used for manufacturing and output services, our considered view is that the basic requirement of nexus between input and output services, as a condition flowing from the Cenvat Credit Rules, must be met. The learned Counsel repeatedly str....
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....credit was taken were mostly directly related to the manufacturing activities at Pune. And had no connection with the service of renting of property. Therefore, there is no logic in the argument that credit on such input services can be used for paying the service tax liability on the renting of property in Mumbai. The reliance placed on other judgements such as Lakshmi Technology & Engg. Ind. Ltd. (supra) are in a different context. We can understand if the factory itself is located in a rented premises, then perhaps the nexus could be there but in the present case we are of the view that input credit cannot be utilized for paying service tax liability on the renting of immovable property service provided in Mumbai. Ld AR has correctly pla....