TaxTMI 
TaxTMI 
2024 (7) TMI 1745
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce tax paid on input services used for providing its output services. 3. On 28.12.2004 an agreement was executed with Ranbaxy Laboratories Ltd., which is engaged in the field of research, development, manufacture and sales of medicines, sales of pharmaceutical products. As per the Agreement the Appellant agreed to reserve 70 patient beds on a continuing basis and make available the necessary infrastructure facilities and related utilities at its Hospital for the exclusive use of Ranbaxy on terms and conditions as set out in the Agreement. The beds so reserved along with the utility facilities shall comprise a composite area of about 30,000 sq. feet within the hospital which shall be used exclusively by Ranbaxy as per terms of the agreement. As per Clause 1.7 of the Agreement, Appellant was to provide uninterrupted power supply and central air-conditioning alongwith all the maintenance and all other common facilities to Ranbaxy. 4. On 22.05.2008 an agreement was executed with Amalgamated Bean Coffee Trading Co. Ltd. [ABCTCL] by the Appellant to provide space on rent on plug and play basis for setting up and operating an Xpress Counter to provide wholesome and hygienic food. As....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut credit was availed by the Appellant were used for providing health care services as they bore no nexus with renting of immovable property service. Hence, the same was inadmissible. b. That the documents pertaining to CENVAT Credit were not produced before the Department. c. That during the period 01.07.2010 to 30.04.2011 Appellant has provided taxable as well as exempted (non-taxable) services. As per Rule 6 of the CENVAT Credit Rules, 2004 (hereinafter referred to as "the Credit Rules"), Appellant should have taken the credit which was attributable to the provision of taxable output service only. That Appellant should have reversed the credit as provided in the said Rule. 10. On 22.02.2016 Appellant filed reply to SCN giving detailed submissions in respect of the allegations leveled in the SCN and on Appellant admittedly submitted several documents viz. ST-3 Returns, Agreements, CENVAT Registers, sample invoices etc. in support of the Reply dated 22.02.2016 along with year wise working of Cenvat eligibility. 11. The Commissioner passed the impugned Order-in-Original wherein the demand raised in the aforesaid SCN was confirmed as under:- "(i) I d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt has not produced the relevant cenvatable documents. In the impugned order itself, the Ld. Adjudicating Authority has noted that CENVAT Documents including CENVAT Registers for FYs 2008-09, 2009-10 and 2010-11 and various invoices have been submitted by the Appellant during the adjudication proceedings. 16. Also he submitted that the Appellant has taken 100% credit of the input services that fall under the erstwhile Rule 6(5) of the Credit Rules and in respect of the remaining input services only proportionate credit was availed. as per the erstwhile Rule 6(5) of Credit Rules, 100% credit was allowed of the tax paid on sixteen taxable services such as Management or Business Consultant's service, Security Agency's service, Banking and other financial services, Management, maintenance or repair service etc. listed under Rule 6(5) that are used for both exempted and taxable services, thus in respect of these services there is no requirement to reverse proportionate credit even if these services are partly used for provision of exempted services. Rule 6(5) of the Credit Rules is extracted below for ease of reference: "(5) Notwithstanding anything contained in sub-rules (1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Appellant to Ranbaxy. To further clarify, the infrastructure facilities and related utilities are agreed to be provided which therefore, includes all activities that are required to run the hospital. 21. He further submitted that as per the agreements entered into by the Appellant for renting of immovable property, it is the liability of the Appellant to maintain the rented property and make it fully functional to enable the respective service recipients to run their businesses. To illustrate, the relevant para of the agreement dated 15.05.2010 entered into between the Book Cafe Co. (First Party) and Appellant (Second Party). 22. Learned Authorized Representative has reiterated the discussions and findings of the impugned order. 23. Heard both sides and perused the appeal records. 24. Before proceeding in the matter few tables have been referred by the Appellant which are reproduced below:- a. CENVAT Credit availed during FY 2009-10: TABLE 1 Month S. Tax E. Cess S H E Cess Total April 0 0 0 0 May 2,68,159 8,045 0 2,76,204 Jun 4,24,814 12,742 0 4,37,556 July 4,39,340 13,179 0 4,52....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CREDIT DENIED 1,19,41,004 (As per SCN dated 14.10.2014) Break up of the amount of Rs. 1,19,41,004 is as under: a. Rs. 41,00,908 pertains to the opening balance for the FY 2009-10. b. Rs. 32,55,257 has been availed in the FY 2009-10 c. Rs. 13,59,042 has been availed in the April 2010 to June 2010 d. Rs. 32,25,797 has been availed during July 2010 to the end of FY 2011-12 Note-1: Calculation for Rs. 32,25,797/- (Credit taken for July 2010 to the end of FY 2011-12 was Rs. 65,81,076/- out of which Rs. 6,03,169 was allowed as Credit and Rs. 59,77,898/- was considered to be reversible but only Rs. 27,52,110/- was actually reversed. [Refer page 37 of the Appeal Memo] Note-2: The amount of Rs. 27,52,110 is reflected from reversal shown for the July 2010 to March 2011. Note-3: The Ld. Adjudicating Authority has not considered the amount of reversal of Rs. 4,04,449/- i.e. reversal made for the period May and June 2010. 25. The Appellant has also produced Challan No. 10243 dated 29.09.2014, whereby service tax amounting to Rs. 5,72,457/- has been paid by it. 26. In response to the detailed written submissions filed by the Appellant, parawise commen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tenance and operation of Rented Commercial premises given to the lessees. It was also stated that the arrangement between the Appellant and the Tenants is on plug and play basis and accordingly the Lease Rent was also decided. The Appellant had also maintained that the lessees are all situated within the common hospital premises. In para 12, it was stated by the Appellant that infrastructure facilities and related utilities are agreed to be provided by it to Ranbaxy Laboratories Ltd. and therefore includes all activities that are required to run the hospital. In para 13, Agreement clauses with Book Cafe Co. were cited which show that it was the responsibility of the Appellant to provide uninterrupted power, central air conditioning, maintenance of common areas, etc. In parawise reply, the Department has not disputed the fact that the Appellant is required to provide these facilities to the lessees. It is also not in dispute that on the charges collected from these lessees, Service Tax is paid by the Appellant. If that be so, there appears to be no dispute that in fact the expenditure incurred by the Appellant on various of its activities are also relatable to the taxable output. He....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing copy of Agreements, various replies filed by them before the authorities, Service Tax returns for the period in question, copies of Cenvat credit registers for these three years and copies of invoices for the F.Y. 2008-09, 2009-10 & 2010-11 with supporting documents. The Ld. DR has not disputed these facts. 34. In light of above facts and circumstances, we are of the view that the finding in the impugned order regarding the services having no relation with taxable output and being only related with healthcare services is clearly erroneous and is liable to be set aside. 35. We also find from perusal of the facts which have been presented before us that amount of Rs. 41,00,908/- which is denied as Cenvat credit being part of Rs. 87,15,207/- for the period 01.04.2009 to 30.06.2010 is opening credit on 01.04.2009. In other words Rs. 41,00,908/- is the closing credit or the balance unutilized Cenvat credit as on 31.03.2009. The present show cause notice has been issued for the period 01.04.2009 onwards. The show cause notice is dated 14th October 2014. The Cenvat credit on Rs. 41,00,908/- being relatable to the period up to 31.03.2009, would not have been dealt with in a show ....