TaxTMI 
TaxTMI 
2025 (8) TMI 1470
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....he various input services had no nexus with the taxable output service. Since the input services were availed for the construction of the commercial complex which was immovable property, it was held that these services are used in the manufacture of immovable property on which no duty or service tax is paid and hence, the question of availing cenvat credit did not arise. Accordingly, referring to the definitions of 'input' and 'input service' as specified under Rule 2(k) and 2(l) of Cenvat Credit Rules, 2004, the credit was denied and the impugned order confirmed an amount of Rs.92,10,557/- along with the interest and also imposed penalty under Section 78 of the Finance Act, 1994. Aggrieved by this order, the appellant is in appeal before us. 3. The Learned Chartered Accountant submitted that the appellant had availed cenvat credit on various input services such as telephone services, banking services, chartered accountant services, general insurance service, security services, real estate services, electrical installation services, consultancy services, erection commissioning services, management maintenance and repair services, architecture services, construction services etc.....
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.... 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 taxable service. It is not being constructed for its own sake but is being built with the intention of providing taxable service. It has been used for providing taxable service and service tax has been paid on such taxable service. Therefore, the appellants are entitled to Cenvat credit as input, capital goods and input services are directly relatable to the taxable service which it is providing. Rendering taxable service is impossible where the structure comes into existence and the structure will come into existence only with the help of inputs, capital goods and input services. The mere fact that the structure is ....
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.... 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 the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, i....
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....s 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 manufacture" stands complied with. In our view, one has to therefore read the definition in its entirety. 9. There is no dispute, in these cases, that the assessee used cement and TMT bar for providing storage facility without which storage and warehousing services could not have been provided. Therefore the finding of the original authority as well as the appellate authority are clearly erroneous, which was correctly rectified by the CESTAT. In so far as the levy of penalty under Rule 15(2) of the Rules is concerned, unless and ....