TaxTMI 
TaxTMI 
2020 (4) TMI 275
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....1 March, 2012 in the second show cause notice dated 16 April, 2013. The Appellant constructed a commercial Mall in the name of 'DLF Emporio Mall' in Delhi using various inputs, input services and capital goods and thereafter rented out space in the aforesaid constructed Mall for commercial purposes, which activity would be covered under "renting of immovable property" RIP service as defined under section 65 (19a) of the Finance Act, 1994 the Finance Act. The appellant paid service tax on this RIP service. The appellant also availed CENVAT Credit on inputs, input services and capital goods used in the construction of the Mall and utilized the same for payment of service tax on RIP services provided by it. 3. However, two show cause notices dated 15 March, 2012 and 16 April, 2013 were issued to the appellant mentioning that it appeared that CENVAT Credit was not available on the inputs, input services and capital goods used in the construction of the Mall since service tax was not leviable on it. 4. The appellant filed detailed replies dated 30 April, 2013 and 11 December, 2013 to the aforesaid two show cause notices and denied the allegations made therein. 5. The Commissioner did....
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....vices' is required to be disallowed to them in terms of Rule 14 of the CENVAT Credit Rules, 2004 read with Section 73 of the Finance Act, 1994 & equal amount required to be recovered from them under Section 73 of the Act ibid." Xxxxxxxxxxxxxxxxxxxxxxxxxxx 23.2 From the foregoing, it appears that there is no nexus between the impugned inputs/ input services and the output services provided by the noticee as these inputs and input services were used for the construction of commercial building and not for the Renting of Immovable Property Services provided by the Noticee. Xxxxxxxxxxxxxxxxxxxxxxxxxxxx 23.3.............................In the subject case, the building did not suffer any central excise duty or service tax. The question of utilization of inputs, input services and capital goods which went into the construction of the building ended with the completion of the construction of the building. The activity of construction of the building is independent from the activity of "Renting out the said premises". Therefore, the duties paid on the inputs, capital goods, input services used in the construction of the building cannot be accumulated and used in discharging the serv....
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....vice Tax Appeal No.60752 of 2017. 5. Navaratna S.G. Highway Prop. Private Limited vs. Commissioner of Service Tax, Ahmedabad 2012 (28) S.T.R. 166 (Tri.-Ahmd.). 6. Ruchi Malls Pvt. Ltd. vs. Commissioner of Central Excise, Delhi-II 2018-TIOL-1991-CESTAT-DEL. 7. Oberoi Mall Limited vs. Commissioner of Service Tax, Mumbai-II 2017 (47) S.T.R. 292 (Tri.-Mum.). 8. Vamona Developers Private Limited vs. Commissioner of Customs, Central Excise & Service Tax, Pune-III 2016 (42) S.T.R. 277 (Tri.- Mum.) 9. Ascendas IT Park (Chennai) Limited vs. Commissioner of Service Tax, Chennai 2018-VIL-55-CESTAT-CHE-ST. 8. Learned Counsel also submitted that the amendment made in the definition of "input" and "input services" with effect from 1 April, 2011 would not be applicable in the present case because though the disputed period may be from 1 April, 2011 to 31 March, 2012, but the services were received by the appellant prior to 1 April, 2011 as a result of which, the appellant would be entitled to avail CENVAT Credit. In support of this contention, learned Counsel has placed reliance upon a Circular dated 29 April, 2011 issued by the Central Board of Excise and Customs CBEC, wherein it has ....
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....roducts 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; but shall not include cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods; (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 ....
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....gineering Indus Ltd. [reported in (2011) 23 STR 265 (Tri.-Chennai)] and also the decision in the case of Navaratna S.G. Highway Property Private Limited Vs. CST [reported in (2012) 28 STR 166 (Tri.-Ahmd.)] and held that without construction of the building, the renting of immovable property services cannot be provided and that therefore, construction service is an eligible service for credit for providing output service of renting of immovable property. 11. In our considered view, the conclusion of the Tribunal is well founded, as construction service is an eligible service for credit for providing output service of renting of immovable property and without construction of the building, the renting of immovable property cannot be provided. We are also of the opinion that there is no error in the decision taken by the Tribunal." 18. The aforesaid decision of the Madras High Court makes reference to the decision of the Tribunal in Navaratna S.G. Highway. The said decision in Navaratna S.G. Highway, after placing reliance upon a decision of the Andhra Pradesh High Court in Sai Sahmita Storages, observed as follows:- "3.2 The definition of 'inputs' is limited to the definition of ....
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....e irrespective of the fact that inputs and input services were used for creation of an immovable property at the intermediate stage, if it was ultimately used in relation to provision of output service or manufacturing of final products." 20. In view of the aforesaid decisions of the High Courts, there is no manner of doubt that CENVAT Credit availed by the appellant on inputs, inputs services and capital goods service used for construction of the Mall, which was ultimately let out could not have been denied to the appellant. The findings to the contrary recorded by the Commissioner cannot be sustained and are, accordingly, set aside. 21. The only issue that now remains to be decided is whether the amendment made with effect from 1 April, 2011 in the definition of "input service" will be applicable to the facts of the present case since the period of dispute in the second show cause notice is from 1 April, 2011 to 31 March, 2012. The second show cause notice dated 16 April, 2013 makes no mention of the amendment made in the definition of 'input service', much less mentioning that the 'input services' have been received by the appellant after 1 April, 2011. In reply to the show ca....