Custom, Excise & Service Tax Tribunal
Allen Career Institute vs Jodhpur 1 on 5 July, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-SM
COURT - III
Service Tax Appeal No. ST/51327/2018-ST[SM]
[Arising out of Order-in-Appeal No. 114(CRM)ST/JDR/2017-18 dated
05.03.2018 passed by the Commissioner, Central Goods and Service
Tax, Jodhpur]
M/s Allen Career Institute ...Appellant
Vs.
C.G.S.T. CC & C.E., Jodhpur ... Respondent
Service Tax Appeal No. ST/51332/2018-ST[SM] [Arising out of Order-in-Appeal No. 155(AG)/CE/JDR/2018 dated 09.03.2018 passed by the Commissioner (Audit), Central Excise & CGST, Jodhpur] M/s Allen Career Institute ...Appellant Vs. C.G.S.T. CC & C.E., Jodhpur ... Respondent Present for the Appellant : Mr. MB Maheswari, CA Present for the Respondent: Mr. P. Juneja, D.R. Coram: HON'BLE MRS. RACHNA GUPTA, MEMBER (JUDICIAL) Date of Hearing : 26.06.2018 Pronounced on : 05.07.2018 FINAL ORDER NO. 52420-52421/2018 PER: RACHNA GUPTA The Order of Commissioner (Appeals) dated 05.03.2018 has been challenged by the present Appeal. The appellant has mentioned it to be partnership firm mainly engaged in 2 Service Tax Appeal Nos. ST/51327 & 51332/2018-ST[SM] commercial coaching activities to the students preparing for Engineering and Medical Entrance Examinations at Kota and is duly registered with service tax since 22.05.2009. The said category which is taxable under Section 65(105) (zzc) of the Finance Act, 1994 (The Act in short). Department during the course of the audit of records of the appellant found appellant to have been wrongly availing and utilizing the Cenvat Credit of Service Tax amounting to Rs. 1,42,324/- on inadmissible input service, i.e. service portion in the execution of Works Contract and Construction Services during the period w.e.f. October 2013 to March, 2015. Resultantly, a Show Cause Notice dated 15.10.2014 was issued levying the said demand. The original Adjudicating Authority vide its Order dated 17.06.2015 confirmed the said demand alongwith interest and with the imposition of the penalty for the same amount. The said Order was challenged before the Commissioner (Appeals) who vide the impugned order has upheld the Order. Hence the present Appeal.
2. I have heard Shri M.B. Maheshwari, CA for the appellant and Shri P. Juneja, Ld. DR for the Department. It is submitted on behalf of the appellant that the appellant has availed the Cenvat Credit on the expense incurred for getting the premises, where the appellant is rendering commercial coaching painted. It is submitted that the Department has wrongly denied the said expense as input, alleging it to be an expense for execution of Works Contract for Construction. It is impressed upon that getting premises painted amounts to 3 Service Tax Appeal Nos. ST/51327 & 51332/2018-ST[SM] maintenance which is out of the ambit of definition of construction. The Works Contract Service is excluded from the definition of Input only in case of construction but not in case of the maintenance. The Adjudicating Authority have failed to appreciate the same and have wrongly confirmed the demand. The Order under challenge is prayed to be set aside and Appeal is prayed to be allowed. Appellant has relied upon Sun Pharmaceuticals Industries Ltd. vs CCE, Surat-II (2016) 45 STR 340 (Cestat, Mumbai) & Red Hat India (P.) Ltd.
vs Principal Commissioner, Service Tax Commissionerate, Pune (2016) 70 taxmann.com 132 (Cestat, Mumbai).
3. While rebutting these arguments, it is submitted by the Ld. DR that the Commissioner (Appeals) has been very clear as is apparent from the Order under challenge that appellant has failed to produce any evidence to prove that the services on which the Cenvat Credit is taken, have been used by the appellant for providing an output service. Also there is no evidence that the appellant was getting the same premises painted where he was rendering coaching services. In the absence of any evidence, the Commissioner (Appeals) have rightly confirmed the Order-in-Original and confirmed the demand upon the appellant. Appeal is accordingly prayed to be rejected.
4. While rebutting, the Certificate of Chartered Engineer for the appellant has brought to my notice alongwith the invoices 4 Service Tax Appeal Nos. ST/51327 & 51332/2018-ST[SM] as are attached with the Appeal impressing upon that the invoices are clear about the description of the premises which have been painted to be the premises which are used as a coaching centre and are the premises of the appellant. The prayer for allowing the Appeal is reiterated.
5. After hearing both the Counsels, I am of the considered opinion as follows:
a) The moot question to be considered is as to whether the service of getting its premises painted is an input service as defined in Rule 2(1) of Cenvat Credit Rules, 2004 for which the appellant was entitled to take the credit. For the purpose, the definition for input service is very much relevant which reads as follows:
1) Rule 2(K) of Cenvat Credit Rules, 2004 "input service" means -
(i) services provided or agreed to be provided by a person located in non taxable territory to a person located in non taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India where service tax is paid by the manufacturer or the provider of output service being importer of goods as the person liable for paying service tax for the said taxable services and the said imported goods are his inputs or capital goods; or 5 Service Tax Appeal Nos. ST/51327 & 51332/2018-ST[SM]
(ii) any service used by a provider of output service for providing an output service; or
(iii) any service used by a 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 modernisation, 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, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal, but excludes:
(A) service portion in the execution of a works contract and construction services including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for -
(a) construction or execution of works contract of a building or a civil structure or a part thereof; or
(b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or 6 Service Tax Appeal Nos. ST/51327 & 51332/2018-ST[SM] (B) services provided by way of renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods; or (BA) service of general insurance business, servicing, repair and maintenance, in so far as they relate to a motor vehicle which is not a capita goods, except when used by -
(a) a manufacturer of a motor vehicle in respect of a motor vehicle manufactured by such person;
or
(b) an insurance company in respect of a motor vehicle insured or reinsured by such person; or (B) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as leave or home travel concession, when such services are used primarily for personal use or consumption of any employee;"
Explanation:- for the purpose of this clause, sales promotion includes services by way of sale of dutiable goods on commission basis.
The bare perusal of the definition shows that any service which is not per se for construction of building but is merely for renovation/ modernisation/ maintenance works, the same is very much inclusive in the definition of input services and as 7 Service Tax Appeal Nos. ST/51327 & 51332/2018-ST[SM] such are eligible for credit under this rule. Though the Department has alleged the impugned service of the appellant as the one for Works Contract Service but law has been settled in the case of Redhat India Pvt. Ltd. Vs Principal Commissioner, Pune 2016-17 Tax main 132 (Tri.- Mumbai). It was held that even the Works Contract Services used for maintenance of office equipment and building are not excluded from the definition of input service and hence the same is eligible for the input service credit.
b) The authorities below have taken the plea of lack of evidence but to my opinion since the Department has come up with the plea of service of the appellant as one being under the category of Work Service Contract, the entire burden was on the Department to prove the same. Burden thereof cannot be shifted upon the appellant. Appellants still have produced documents on record from it is apparent that the appellant was getting the building of Allen Career Institute in Sankalp Building painted and the areas as were painted were the class rooms, conference halls, outer and inner boundary as well as the building housing such class rooms. This perusal makes it clear that appellant was simply maintaining the premises where he was rendering commercial coaching service for which he is duly registered and is discharging his liability. The same is nowhere been denied and disputed. As discussed above, maintenance is different from the construction and is very much inclusive of the definition of input service, I am of the firm opinion that the appellant has rightly considered the same 8 Service Tax Appeal Nos. ST/51327 & 51332/2018-ST[SM] as input service and has rightly availed the credit thereof. The Adjudicating Authority is held to have miserably failed to appreciate the proper evidence on record. Not only this, they have also failed to properly interpret the provision of law. As a result, the Order under challenge is held to not to be sustainable. It accordingly stands set aside. Resultantly, Appeal in hand is hereby allowed.
[Pronounced in the open Court on 05.07.2018] (RACHNA GUPTA) MEMBER (JUDICIAL) D.J.