Custom, Excise & Service Tax Tribunal
City Reality & Development Pvt. Ltd vs Commissioner Of Central Excise, ... on 16 January, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.
Appeal No. ST/85609/14
(Arising out of Order-in-Original No. PUN-EXCUS-003-COM-027-13-14 dt.26.11.2013 passed by the Commissioner of Central Excise & Service Tax, Pune-III)
City Reality & Development Pvt. Ltd.
:
Appellant
VS
Commissioner of Central Excise, Pune-III
:
Respondent
Appearance Shri G. Natrajan, Advocate for Appellant Shri M.K. Sarangi, Jt. Commissioner (A.R) for respondent CORAM:
Honble Shri Ramesh Nair, Member (Judicial) Honble Shri Raju, Member (Technical) Date of hearing : 16/01/2018 Date of pronouncement : 26/02/2018 ORDER NO.
Per : Ramesh Nair The fact of the case is that the appellant are engaged in provision of service of Architectural Service, Real Estate Agents Service, Construction Services, Commercial or Industrial Buildings and Civil Structure, Transport of Goods by Road, Advertising time or space, Sponsorship Service and Renting of Immovable Property Service. The appellant availed cenvat credit of duty /taxes paid on input service and capital goods for providing output service or construction of complexes multiplexes and providing renting of immoveable property service, advertising time or space and other service. Show cause notice was issued wherein it was contended that the credit on input, input service and capital goods used for constructing the mall is not admissible against the output service namely renting of immoveable property that is mall on the ground that the mall is a immoveable property. The adjudicating authority confirmed the demand of cenvat credit availed on inputs, input service and capital goods. Being aggrieved by the order-in-original, appellant filed the present appeal.
2. Shri G. Natrajan, Ld. Counsel appearing on behalf of the appellant submits that on the issue involved here in this Tribunal and various High Courts have passed the judgments wherein it was held that the cenvat credit on the inputs, input service and capital goods used for constructing a mall is admissible and the said credit can be utilized for payment of service tax on the output service that is renting of said mall. He placed reliance on the following judgments:
(i) City Centre Mall Nashik Pvt. Ltd. Vs. Commissioner of Central Excise And Service tax, Nashik 2017-TIOL-4322-CESTAT-MUM
(ii) Oberoi Mall Ltd. Vs. Commissioner of Service Tax, Mumbai-II 2017 (47) STR 292 (Tri.-Mumbai)
(iii) Vamona Developers Pvt. Ltd. Vs. Commr. Of Cus. C.EX. & S.T., Pune 2016 (42) STR 277 (Tri.-Mumbai)
(iv) Commissioner of Central Excise, Salem Vs. Ashok Agencies 2016 (41) STR 647 (Tri.- Chennai)
(v) Mundra Port & Special Economic Zone Ltd. Vs. C.C.E. Rajkot 2009 (13) STR 178 (Tri.-Ahmd.)
(vi) Mundra Ports & Special Economic Zone Ltd. Vs. C.C.E. & Cus.
2015 (39) STR 726 (Guj.)
(vii) Maharashtra Cricket Association Vs. Commr. Of C. Ex., Pune-III 2016 (41) STR 833 (Tri.-Mumbai) Ld. Counsel submits that all the above judgments and based on the decision of this Tribunal and decision of Honble Andhra Pradesh High Court in the case of CCE Vs. Sai Sahmita Storages (P) Ltd. 2011 (270) ELT 33 A.P. In view of this settled position the issue is no longer res integara.
3. On the other hand, Shri M.K. Sarangi, Ld. Jt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that all inputs, input service and capital goods were used for construction of mall. Accordingly the construction became the output service and not the renting of immoveable property, therefore the cenvat credit availed by the appellant for utilization towards the payment of service tax in respect of renting of mall is incorrect and illegal. He submits that all the cases in support of the appellant relied upon by the Ld. Counsel are based on the decision in the case of Navaratna S.G. Highway Prop. Pvt. Ltd. Vs. Commr. Of S.T. Ahmedabad 2012 (28) STR 166 (TYri.-Ahmd.) and Sai & Samhita Storages Pvt. Ltd. Vs. C.C.& C.E. 2010 (255) E.L.T. 91 (Tri.-Bang.). However as per the department the appellants have not paid service tax on commercial or industrial construction service with regard to construction of mall, hence cenvat credit in respect of inputs/input service/capital goods is not admissible. He further submits that the mall constructed by the appellant cannot be treated as goods being embedded to earth and immoveable. He further submits that the appellant have not substantiated the bifurcation of the cenvat credit that is inputs/input service/capital goods and the details of the same have not been shown in the ST.3 Returns. He further submits that the appellant have shown the entire credit as opening balance of April 2011 whereas there was no closing balance as on 31.3.201. For this reason also the Cenvat Credit shown to have been availed before the registration under renting of immoveable property service cannot be allowed. He relied upon/distinguish following judgments:
(i) Sai & Samhita Storages Pvt. Ltd. Vs. C.C.& C.E. 2010 (255) E.L.T. 91 (Tri.-Bang.).
(ii) Commr. Of.C.Ex. Vs. Sai Sahmita Storages (P) Ltd.
2011 (270) ELT 33 A.P.
(iii) Navaratna S.G. Highway Prop. Pvt. Ltd. Vs. Commr. Of S.T. Ahmedabad 2012 (28) STR 166 (TYri.-Ahmd.)
(iv) Essar Telecom Infrastructure Pvt. Ltd. Vs. Commr. Of S.T. Mumbai 2015 (40) STR 591 (Tri.-Mumbai)
(v) Vodafone India Ltd. Vs. Commissioner of Central Excise, Mumbai-II 2015 (324) E.L.T. 434 (Bom.)
(vi) Maruti Suzuki India Ltd. Vs. Commissioner of C. Ex. & S.T., Delhi-III 2016 (42) STR 527 (Tri.-Del.)
(vii) DLF Ltd. Vs. Commissioner of S.T., (ADJ.), New Delhi 2015 (37) STR 467 (Del.)
(viii) Lakhan Singh & Co. Vs. Commissioner of Central Excise, Jaipur 2016 (46) STR. 297 (Tri.-Del)
(ix) Tower Vision India Pvt. Ltd. Vs. Commissioner of C. Ex. (Adj., Delhi 2016 (42) STR 249 (Tri.-LB)
(x) Maruti Suzuki India Ltd. Vs. Commr. Of Central Excise, Delhi-III 2017 (5) G.S.T.L. 18 (P & H)
(xi) Glaxy Mercantile Ltd.
2014-33-SR-39-T-Del.
(xii) Touraid Travels Vs. CCE 2014(35) STR 235 (All.)
(xiii) CCE Vs. Reliant Advertising 2013-31-STR 166-T-Del;
(xiv) Vodafone Digilink Vs. CCE 2013-29-STR-229-Raj.
He also submits that the extended period was rightly invoked as the appellant have not disclosed the correct position in their ST.3 returns. Therefore the extended period was rightly invoked for confirmation of demand. In this regard he placed reliance on the following judgment:
(i) Touraid Travels Vs. CCE 2014(35) STR 235 (All.)
(ii) CCE Vs. Reliant Advertising 2013-31-STR 166-T-Del;
(iii) Vodafone Digilink Vs. CCE 2013-29-STR-229-Raj.
4. We have carefully considered the submissions made by both the sides. We find that the issue to be decided by us are as under:
(a) Whether the appellant is entitled for cenvat credit in respect of inputs, input service and capital goods used for construction of mall which was rented out on which the service tax was discharged by the appellant.
(b) The appellant have shown the entire credit as opening balance of the April 2011 whereas in the month of March 2011 the closing balance was nil. In this fact whether the appellant is entitled for the credit in respect of inputs, input service and capital goods received and used prior to 1.4.2011 for construction of mall.
5. As regard the first issue though the Ld. AR tried to distinguish the various judgments wherein the cenvat credit was allowed, we have considered all the judgments and passed order in City Centre Mall Nashik Pvt. Ltd.(supra) wherein the identical facts and the law point was involved. In the said judgment we have disallowed the cenvat credit in respect of the inputs used for construction of mall relying upon the judgment of Honble Bombay High Court in the case of Bharti Airtel Ltd. Vs. Commissioner of Central Excise, Pune-III 2014 (35) STR 865 (Bom.). Maintaining the said legal position in the present case also we hold the appellant is not entitled for the cenvat credit in respect of the inputs used for construction of mall. As regard the cenvat credit in respect of input service and capital goods. We have already taken a view that the cenvat credit is admissible in respect of input service and capital goods used for construction of mall against renting of mall on which service tax was paid. In the decision of this Tribunal in the case of City Centre Mall Nashik Pvt. Ltd., following the judicial discipline we cannot deviated from our views already taken unless until there is substantial change of circumstances in this settled legal position. Since we have already considered all the judgments relied upon by the Ld.AR we need not to discuss each and every case again and again. As regard the issue that the appellant have shown the entire credit as opening balance of April 2011 which pertains to the period prior to completion of construction of mall. We find that it is only a clerical error on the part of the appellant in making entry of cenvat credit which was otherwise admissible to them. Even if the entry of cenvat credit on individual services are made on the date of receipt or the consolidated amount for the said credit was shown as opening balance of credit of April 2011 so long there is no dispute about the amount of the credit. Cenvat Credit cannot be denied only for such clerical error. As per our above observation, we hold that the appellant is not entitled for cenvat credit, in respect of input however they are entitled for cenvat credit in respect of input service and capital goods, accordingly the adjudicating authority may re quantify the demand. In the facts and circumstances of the case the penalty imposed under Section 78 is set aside by invoking Section 80 of the Finance Act. The appeal is partly allowed in the above terms.
(Pronounced in court on 26/02/2018)
(Raju)
Member (Technical)
(Ramesh Nair)
Member (Judicial)
SM.
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ST/85609/14