TaxTMI 
TaxTMI 
2021 (9) TMI 676
X X X X Extracts X X X X
X X X X Extracts X X X X
....al/ industrial buildings or civil structures, Transport of goods by road/goods transport agency service, Construction of residential complex service, Sponsorship service provided to body-corporate or firm including sports sponsorships, Business support service, Legal consultancy service, Other Taxable Services Other than the 119 listed (out of which ST payable on certain services under Reverse Charge Mechanism (for short RCM). During the course of audit of the records of the appellant till 30.06.2017 and TRAN-1, conducted by the Internal Audit Team of the CGST Audit Commissionerate, Jaipur, it was observed that the appellant has wrongly/irregularly transferred/taken and utilized inadmissible Input Tax Credit (for short ITC) amounting to Rs. 14,73,718/- through Tran-1[Table 7(a)] against claimed to be Inputs and Inputs contained in Semi Finished Goods and Inputs contained in Finished Goods. As per details furnished by the appellant in Table 7(a) of TRAN-1, it appeared that the ITC involved in the present case, appeared to inadmissible to the appellant on various grounds, as follows:- (i) The Ready Mix Concrete(for short RMC) has been-received by the taxpayer after availing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....017. After considering the submission of the appellant, the adjudicating authority has confirmed the demand alongwith interest and penalty, as proposed in show cause notice. 3. Being aggrieved the impugned order, the appellant has filed appeal on the various grounds, which are as under:- A. THE APPELLANT HAS VALIDLY CARRIED FORWARD THE CREDIT UNDER SECTION 140 OF THE CGST ACT, AND THUS, DEMAND CONFIRMED IN THE IMPUGNED ORDER IS NOT SUSTAINABLE. A.1 It is submitted that the carrying forward of credit by the Appellant was in accordance with provisions of Section 140 of the CGST Act, and thus, confirmation of demand in the Impugned Order is not sustainable. A.2 As the demand has been confirmed in the Impugned Order on various issues in background of Section 140, the arguments below will deal with each of the issues raised in the SCN and confirmed in the Impugned Order. RMC A.3 In the present case, it is not disputed that RMC, credit on which was carried forward by the Appellant in its Tran-1, was input held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day. A.4 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mplex. It is also an admitted fact that the contract for construction of residential complex in the present case includes construction of such pavement and swimming pools. As a matter of fact also, the cost of construction of the common area forms part of the consideration charged by the Appellant from buyers. Thus, even if the paver blocks and head gears form part of the common area, the cost of construction of common area forms part of the taxable value of construction services, and thus, the denial of credit is improper. A.10 In this regard, reliance is placed on decision of Hon'ble Tribunal in Abideep Interlock Pavers Pvt Ltd v. CCE, 2018-TIOL-3509-CESTAT- BANG. A.11 The Impugned Order has further observed that Service Tax is not leviable on goods/ immovable property and thus, value thereof was not part of construction services. A.12 It is pertinent to note here that credit on inputs and input services, utilized for construction service, is allowed under the GST regime. The composite supply of service of construction along with transfer of property in goods, is taxable as one supply of service. Therefore, credit on such inputs wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....allegations in the SCN. In the absence of any findings in the Impugned Order, thus, the aforesaid allegations in the SCN are liable to be ignored and deemed as dropped. A.19 Without prejudice, it is submitted that immovability is not a criterion to determine the eligibility of a registered person to take Cenvat credit under the existing laws or ITC under the GST laws. No provision of the CC Rules or that of the CGST Act lays down that immovability is also a criterion for determining the admissibility of credit/ ITC. When the legal provisions are clear to that effect, the super-imposed restrictions applied in the impugned proceedings have no legs to stand. A.20 The SCN further refers to the definition of 'goods' under Section 2(52) of the CGST Act and alleges that building under construction, being attached to earth, cannot be called as goods. A.21 It may be noted that the aforesaid allegation in the SCN shows complete non-application of mind on behalf of the SCN-issuing authority. The subject-matter of provisions of Section 140(3) of the CGST Act is the inputs, which are used by the supplier. The output supply or the endresult of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the Impugned Order are based on isolated and half-hearted reading of Section 140(3). As a trite law, the legal provisions are to be read as a whole. A.29 A simple reading of the opening portion of Section 140(3) shows that it applies to more than one category of registered persons. Given the scheme of punctuation used in the opening portion, it is clear that it is applicable to the following categories of registered persons: a) who was not liable to be registered under the existing law, or b) who was engaged in the manufacture of exempted goods or provision of exempted services, or c) who was providing works contract service and was availing of the benefit of notification No. 26/2012-Service Tax, dated the 20^th June, 2012, or d) a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer. A.30 The opening portion of Section 140(3) uses 'comma' as punctuation mark and the word 'or' thereafter between each of the aforesaid category, intending that a person falling under any of these categories is covered under the scope of Section 140(3). The Appellant is squ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng law, or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contract service and was availing of the benefit of notification No. 26/2012-Service Tax, dated the 20th June, 2012 or a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer, shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the following conditions, namely:- (i) such inputs or goods are used or intended to be used for making taxable supplies under this Act; (ii) the said registered person is eligible for input tax credit on such inputs under this Act; (iii) the said registered person is in possession of invoice or other prescribed documents evidencing payment of duty under the existing law in respect of such inputs; (iv) such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day; and (v) the supplier of services is not eligible for any abatement under this Act: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rty other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. The work of the appellant falls within the definition of 'works contract' as given under Section 2(119) of the CGST Act, 2017 and the GGST Act, 2017 as the construction of pipeline network becomes immovable property. Therefore, even if the contract of the appellant was on work-in-process stage on the appointed day, the same would not be covered within the terms 'semi-finished or finished goods' as the term 'goods' covers movable property and not immovable property. 10.7 In view thereof, the appellant is not entitled to avail input tax credit of Central Excise duty and VAT paid on pipes, under sub-sections (I) and (6) of Section 140 of the CGST Act, 2017 and the GGST Act, 2017. 7.2 I find that as per Section 2(59) of the CGST Act,2017, Inputs means any goods other than capital goods used or intended to be used by a supplier in course of furtherance of business. Whereas as per Section 2(52) of the said Act "Goods" means every kind of mov....