TaxTMI 
TaxTMI 
2017 (11) TMI 301
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....r rule 14 of Cenvat Credit Rules 2004 read with Section 75 of the Finance Act,1994; (iv) I impose penalty equal to amount confirmed in (i) above of Rs. 5,46,82,044/- under Rule 15(3)[Prior to 1.3.2010, under rule 15(2) and 15(4)] of the Cenvat Credit Rules,2004 for wrong availment of Cenvat Credit; (v) Service tax amount of Rs. 2,06,07,771/-( Rupees Two crore six lakh seven thousand seven hundred seventy one only), demanded in SCN, is confirmed and I order recovery of the same under section 73(2) of the Finance Act, 1994. (vi) I order recovery of applicable interest on the amount confirmed in (v) above under Section 75 of the Finance Act,1994. (vii) I impose penalty equal to amount confirmed in (v) above of Rs. 2,06,07,771/- under section 78 of the Finance Act, 1994. (viii) I impose penalty of Rs. 30,000/- under section 77(2) of the Finance, 1994 2. The details of the demand confirmed is as under: (A) Demand of Cenvat Credit of Rs. 5,46,82,044/- (March 2007 to March 2011. A.1. Credit on Cement, Steel, TMT Bars, Doors, Windows etc. used for construction of mall under the category of input amounting to Rs. 1,63,67,075/-. A.2. Capital goods used in the mall such....
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....he mall, it cannot be said that the same is immovable property. As regards Cenvat credit of Rs. 1,01,76,663/-, the credit was availed on various services such as architect service, business auxiliary service, C&F agency service, cargo handling service, works contract service, consulting engineer service, erection, commissioning and installation service, these services were used in the construction of mall. As per the above definition of input service used for setting up of the premises of provider of output service is admissible input service hence credit is admissible. As regard the cenvat credit of Rs. 55,01,660/-, the same is related to the various input service such as insurance, management maintenance and repair service etc., these services were used for the operation of the shopping mall. Therefore it is directly related to the output service i.e. renting of immovable property service, management maintenance and repair service, the credit was denied on the ground that these services were used before and after construction of mall. He submits that the period of receipt of service is immaterial. Once the services are used in relation to providing output service of renting of im....
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....rvice of renting of immovable property. As regard judgment relied upon by the Ld. Counsel in the case of Sai Samhita and Mundra Port, the same were overruled by the Hon'ble Bombay High Court in the case of Bharti Airtel Ltd. Vs. Commissioner of Central Excise, Pune-III - 2014 (35 )STR 865 (Bom.). She submits that in the above judgement the construction work of storage and warehousing and port whereas in the present case it is a case of construction of shopping mall which was rented out, therefore the judgements are not applicable. She submits that regarding the cenvat credit on building material such as cement steel, angles, cahnnels etc. by Notification No. 16/2009-CE (NT) dt.7.7.2009 all these building mall were excluded from definition of input service. This issue has been settled by the Larger Bench in the case of Vandana Global Ltd. Vs. Commissioner of C. Ex., Raipur - 2010 (253) ELT 440 (Tri.-LB). Accordingly cenvat credit on goods such as cement steel, angles, channels etc. is not admissible. As regard the cenvat credit on capital goods such as Air Handling Unit, B.K. Pipes, Electric Generating Sets, Refrigeration Machinery, A.C. Chillers, Heat Exchangers, Escalators, Lifts ....
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.... which is not the output service of the appellant, therefore the cenvat credit is not admissible. Moreover, w.e.f. 7.7.2009 the said goods were excluded from the definition of input service. The larger bench of this Tribunal in the case of Vandana Global Ltd.(Supra) also held that credit of goods used for construction of building/structure is not admissible. We therefore uphold the demand of service tax amounting to Rs. 1,63,67,075/-. As regard the cenvat credit availed amounting to Rs. 2,26,36,646/- on the capital goods, we find that all the capital goods fall under the definition of capital goods provided under cenvat credit rules 2004. The adjudicating authority denied the credit only on the ground that these capital goods after installation become immovable goods, therefore the credit is not admissible. We find that all the capital goods were cleared by the supplier on payment of duty therefore the capital goods as such can not be said that it is immovable goods. Merely by installing the capital goods it does not become an immovable goods. If this contention of the adjudicating authority is accepted then all the capital goods such as machinery, equipments, appliances installed ....
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....judgements which reproduced below:- (i) Maharashtra Cricket Association (supra) held that- 8. The issue involved is whether the services such as Architect Services, Consulting Engineers Services, Management Consultancy Services etc. used for construction of sports stadium are admissible input services for taking Cenvat Credit as against the output service of the appellant i.e. renting of the said stadium and other services on which services, service tax was discharged. Whether the service is input service or otherwise, it can be ascertained only on the basis of definition of 'input service' as provider under Rule 2(l) of Cenvat Credit Rules, 2004, which is reproduced below: "Input Services- As per Rule 2(l) of Cenvat Credit Rules, 2004, (prior to 1.4.2011) 'input service' means any service, i) used by a provider of taxable service for providing an output service ; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal]1n, and includes services used in relation to setting up, modernisation, renovation or repairs of a factory, premises ....
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....nt case. However the Ld. Commissioner brushed aside the judgment only giving excuse that he is bound by the Board Circular. In the case of Navaratna S.G. Highway Prop. Pvt. Ltd. (supra), the division bench of Ahmadabad Tribunal in the identical case allowed the Cenvat Credit on the input services used for construction of immovable property which in turn used for renting and other services. The operative para is reproduced below:- "3.2 The definition of 'inputs' is limited to the definition of 'input services' as can be seen from the definition given above. Credit of duty paid on inputs is available when the inputs are used for providing an 'output service'. Therefore, there is a need to say that the inputs have been used for providing an 'output service'. In the case of 'input service', the definition includes input services used by a provider of taxable service for providing an output service. Therefore the definition of input and input service are pari materia as far as the service providers are concerned. That being the position, the decision of the Hon'ble High Court of Andhra Pradesh would be applicable to the present case. In that....
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....ailment of Cenvat Credit on various input services for the construction of the malls and subsequent utilization, we find that in the case of Navratna S.G. Highway Properties (P) Ltd (supra) (wherein one of the member of this bench Shri M.V. Ravindran was presiding) this Tribunal held in favour of the assessee by recording as under: "3.2 The definition of inputs' is limited to the definition of input services' as can be seen from the definition given above. Credit of duty paid on inputs is available when the inputs are used for providing an output service'. Therefore, there is a need to say that the inputs have been used for providing an output service'. In the case of input service' the definition includes input services used by a provider of taxable service for providing an output service. Therefore the definitions of input and input service are pari-materia as far as the service providers are concerned. That being the position, the decision of the Hon'ble High Court of Andhra Pradesh would be applicable to the present case. In that case also, the Hon'ble High Court took the view that without use of cement and TMT bars for construction of warehouse as....
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....t as held by the Hon'ble High Court of Karnataka in the case of mPortal India Wireless Solutions Pvt. Ltd., there is no provision in the Cenvat Credit Rules which imposes a restriction on availment of credit on input services procured before registration is taken. Even though department has filed an appeal against this judgement, we are bound by judicial discipline to honor the judgment of the High Court. 5.1. The next issue for consideration is whether the input service credit is at all admissible for the construction of a mall which is used for providing Renting of Immoveable Property Service. Here again, we are bound to follow the judgments of the Andhra Pradesh High Court in the case of Sai Sahmita Storages (P) Ltd. 2011 (270) ELT 33 (A.P.) as well as the Tribunal judgment in the case of Navratna Highway (supra). In the present case, we find the appellant availed service tax input of Rs. 8.34Crores on following input services: Air Conditioning Work AMC for Support services Auditor Expenses Banking and Insurance Brick Work Business Development Carpentry Work Civil Work Clearing and Forwarding (Custom duty charges) Consultancy Charges Core Cutting Work ....
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....rit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production; (ii) all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service; Explanation 1. - The light diesel oil, high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Explanation 2. - Input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer; (l) "input service" means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to....
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....ute the relevant consideration. Unless and until the said input is used in or in relation to the manufacture of final product within the factory of production, the said item would not become an eligible input. The said expression used in or in relation to the manufacture have many shades and would cover various situations based on the purpose for which the input is used. However, the specified input would become eligible for credit only when used in or in relation to the manufacture of final product. Hydrogen gas used in the manufacture of sodium cyanide is an eligible input, since it has a significant role to play in the manufacturing process and since the final product cannot emerge without the use of gas. Similarly, Heat Transfer Oil used as a heating medium in the manufacture of LAB is an eligible input since it has a persuasive role in the manufacturing process and without its use it is impossible to manufacture the final product. Therefore, none of the categories in the inclusive part of the definition would constitute relevant consideration per se. They become relevant only when the above crucial requirement of being used in or in relation to the manufacturestands complied w....
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....that the Annexure "A" to the show cause notice gives details of Cenvat credit availed on inputs and capital goods for the period 1.6.2007 to 31.3.2011 implying that department has conceded that the Cenvat credit was availed for the construction of mall and Renting of Immoveable Property Service. We have seen the case of Citedal Fine Pharmaceuticals. It was held by the Apex Court that "what would be a reasonable period, would depend on the facts of each case......it would be open to the assesse to contend that it is bad on the ground of delay...............No hard and fast rules can be laid down in this regard as the determination of the question will depend on the facts of each case.Ld AR is relying on this judgement apparently to say that in the present case there is too much delay in claiming cenvat credit. We have held that the cenvat on the input services is admissible in principle and Hon'ble High Court of Karnataka has held that registeration is not a condition for availing cenvat credit. In this situation, whether the delay is reasonable is the question that needs to be answered. It is noted that the appellant took the credit only when the mall was completed. Prior to that ....
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....e, we find that almost the entire credit has been availed on input services which have been used for providing the output service that is Renting of Immoveable Property Service for which there was no restriction under the clause (i) of the definition of input service. The inclusive part of the definition of input service allowed services used in relation to "setting up", modernization, renovation or repairs of a factory, premises of provider of output service etc. The words setting upwere deleted only from 1.4.2011. Therefore the appellant are eligible for the credit in terms of the definition of input service." In view of the above decisions which were given after detailed interpretation of definition of input service, the services used for construction of shopping mall are admissible for cenvat credit. We therefore set aside the demand of Rs. 1,01,76,663/-. As regard the demand of cenvat credit amounting to Rs. 55,01,660/-, the cenvat credit was availed on the services such as advertisement, broadcasting, C.A., cleaning service, insurance service, management maintenance and repair service etc., the same was denied on the allegation in the show cause notice that these services ha....