TaxTMI 
TaxTMI 
2022 (5) TMI 569
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....two appeals are as follows: Service Tax Appeal No. 52469 of 2016 Show Cause Notice Dated 17.04.2012 Order-in- Original No. DLI-SVTAX-003-COM-53-15-16 dated 31.03.2016 Period of Dispute 01.04.2008 to 31.03.2011 Demand Cenvat credit of Rs. 6,57,53,940/- along with Interest Penalties (a) Rs. 6,57,53,940/- under Rue 15 read with Section 78 (b) Rs. 10,000/- under Section 77 Issue Denial or Cenvat Credit availed on inputs, input services and capital goods used for construction of buildings, from where 'Renting of Immovable Property Service' is provided, holding that same result in creation of immovable property, which is neither 'goods' nor 'services' Service Tax Appeal No. 52612 of 2016 Show Cause Notice Dated 23.09.2013 Order-in-Original No. DLI-SVTAX-003-COM-55-15-16 dated 13.06.2016 Relevant period April, 2008 to March, 2011 Demand Rs. 5,55,10,429/-(cenvat credit) Issue Denial of Cenvat credit on inputs, input services and capital goods used for construction of building rented out ....
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...., 2004. Reliance was placed on the following case laws: (a) Regency Park Property Management Services Pvt Ltd. vs. Commissioner, Service Tax, Delhi. [2020-TIOL-549-CESTAT-DEL] (b) Indore Treasure Market City Pvt Ltd. vs. Commissioner, CGST & Central Excise, [2021-TIOL-582-CESTAT-DEL] (c) Mark Soft Tech Pvt Ltd. vs. Commissioner of Central Excsie & Service Tax, [2018-TIOL-3692-CESTAT-HYD] (ii) The definition of "input service" was amended by Notification No. 3/2011-CE(NT) dated 01.04.2011, whereby the services used for construction of a building have been specifically excluded from the ambit of "input services" eligible for CENVAT with effect from 01.04.2011. The amendment was not retrospective and was only prospective. This was clarified by CBEC Circular No. 943/04/2011-CX dated 29.04.2011, wherein it has been stated that the CENVAT credit on "input service" will be available if the services had been provided before 01.04.2011. In these two appeals the relevant period of dispute is 01.04.2008 to 31.03.2011 and, therefore, CENVAT credit on input services used in construction of a building....
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....p; CENVAT credit on cement, steel and cooling tower were used in the construction of the building which is immovable property not subject to excise duty nor service subject to service tax and, therefore, no CENVAT credit is admissible. Reliance was placed upon the decision of the Tribunal in Mundra Port & Special Economic Zone vs. Commissioner of Central Excise, Raikot [2009 (13) STR 178 (Tri-Ahmd)]. Although this decision was reversed by the High Court of Gujarat in [2015 (39) STR 726 (Guj)], the judgment of Gujarat High Court was challenged before the Supreme Court by Special Leave Petition (C) 33238/2015 and is pending. (ii) The Larger Bench of the CESTAT, in Vandana Global vs. Commissioner of Central Excise and Customs, Raipur (Chhattisgarh) [2010 (253) ELT 440 (Tri.-LB)] held that goods like cement, steel etc., used for laying foundation for building supporting structures cannot be treated as inputs in relation to final products and, therefore, no credit of duty is admissible on them. This decision was reversed by the Chhattisgarh High Court in Vandana Global vs. Commissioner of Central Excise and Customs, Raipur (Chhattisgarh) [2018 (16) GSTL 462 (C....
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....vil Appeal No. 5036- 37/2021 Pending (iv) As the matter is pending before the Supreme Court, reliance should not be placed on the decision of the Delhi High Court in Vodafone Mobile or the judgment of the Gujarat High Court in Mudra Port. 8. We have considered the submissions advanced on behalf of both the sides and have perused the records. 9. The short question to be answered is whether inputs, capital goods and input services which are used for construction of buildings and structures, which are then used for providing services are eligible for CENVAT credit or not. 10. The case of the Revenue is that neither these inputs and capital goods nor the input services are directly used for providing services but they are used for construction of immovable property which is neither a good nor a service. Therefore, the inputs, capital goods and input services which go into creation of such an immovable property does not qualify as input, capital goods service or input service under the CENVAT Credit Rules, 2004. 11. The case of the appellant is that the immovable property is a structure which comes in the process of providing ta....
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....r spirit, 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)&n....
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....stablished that inputs mentioned in the inclusive part is "used in or in relation to the manufacture of final product". It is the functional utility of the said item which would constitute 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 ....