TaxTMI 
TaxTMI 
2019 (3) TMI 818
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....nd transfer basis; the rights of the appellant were also recognised as to he may carry out any activity in connection therewith including any infrastructure services. Appellant undertook execution of the project along with other connected activities and activities related to the development of sight and operation of airport. While doing so, appellant developed within the area allocated to them (a) complete airport with services like landing, parking, passengers incoming, outgoing facility, common infrastructure, ground power etc. and charge fees for the same on which service tax liability is discharged; is providing various host of services such as providing accommodation rooms, hall and conference rooms for conducting meetings seminars etc. along with food and other services . On the Airport services, appellant discharges entire service tax liability at the same in the case of accommodation in rooms, it is not discharging this service tax liability but discharges the service tax liability on the revenue generated from conducting meetings seminars etc and other related services. Appellant herein availed CENVAT credit of service tax paid on various inputs like cement, steel and othe....
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.... 13,87,282 13,87,282 9. Availment of CENVAT credit on invalid document 2,32,560 - Total 31,12,80,914 31,10,48,354 * Reversed under protest **Reversed after issuance of SCN He would submit point-wise as under:- i. CENVAT credit availed on steel and cement used in the construction of airport is now covered by the decision of the Hon'ble High Court of Gujarat in the case of Mundra Ports and Special Economic Zone Ltd [2015(39)STR 726 (Guj)]. It is his submission that the adjudicating authority has denied the CENVAT credit only on the ground that construction of Airport is done by sub-contractor and they are not service providers, hence credit of Central Excise duty paid on cement and steel is not available to appellant, He would submit that it is incorrect to say so as they are not concessioners and they procured materials for construction of airport by sub-contracting the activity. He would also submits that another reason for rejecting the CENVAT credit is that Airport is immovable property and appellant is not the owner of the airport and has acquired the right to use the same. It is his submission that the entire issue of availment of CENVAT cred....
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....ludes all its buildings, allied facilities within the airport and conditional exemption availed by the contractor is irrelevant for the appellant to take credit because the credit has been taken on inputs, input services and capital goods which are purchased/procured directly by the appellant on which duty/service tax is paid by the appellant. It is his submission that the capital goods which are procured for hotel were installed and used during the construction of the hotel and the said capital goods are further used in rendering services of out-door catering and other services on which service tax is paid. He submits that appellant is not discharging any service tax on the room rent collected by them in the said hotel. iv. As regards irregular availment of CENVAT credit on input services in the construction of fuel farm at Sl No. 5 of the table herein above, it is his submission that the said fuel farm is required to store the Air Turbine Fuel (ATF) which is a must for rendering any airport services as airlines are filling the fuel from the said fuel farm. v. As regards Sl No. 6 of the table on the eligibility to avail CENVAT credit on ATF, it is his submission that when the AT....
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....004 clearly indicate that CENVAT credit cannot be availed on inputs and input services while providing and used during the provision of exempted services. 6. He submits that the services rendered by the sub-contractor too are exempted from payment of service tax as per Notification No. 16/2005-ST. He relies upon the decision of the Tribunal in the case of ABC Engineering Vs CCE Guntur [2010 (20)STR 145 (Tri Bang] for the proposition. As regards inputs, capital goods and input services used in respect of hotel construction, it is his submission that hotel is not a part of airport and therefore input services and inputs and capital goods cannot be said to have been used for providing airport services. Further, the contractors who constructed the hotel had availed benefit of Notification No1/2006-ST and paid the service tax after taking abatement. It is his submission that this notification was not applicable in cases where the CENVAT credit of duty paid on inputs or capital goods or the CENVAT credit of service tax paid in input services are availed. In view of this, the CENVAT credit availed on various inputs, capital goods and input services for construction of hotel is incorrect.....
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....r input services which are used for construction of airport is covered by the ratio laid down by the Hon'ble High Court of Gujarat in the case of Mundra Ports & Special Economic Zone Ltd (supra) as also by various decisions of the Hon'ble High Court of A.P and Karnataka. In view of the foregoing we find that the adjudicating authority's order of denying CENVAT credit on item No 1 & 2 hereinabove is incorrect and unsustainable. 10. As regards irregular availment of CENVAT credit of central excise duty paid on inputs capital goods and input services in respect of hotel (Novotel) construction (Item No. 3 &4 of paragraph No. 2), we find that the argument of the appellant is that they are providing airport services and the said hotel is situated within the airport. It was also the submission that the said services were to be rendered under the agreement as entered with the Director General of Civil Aviation. In our considered view, the findings of the lower authorities that appellant is not eligible to avail CENVAT credit at Item No. 3 & 4 seems to be correct. We find that the hotel is not a part of the airport and hence cannot be considered as used for rendering airport services. Furt....