Custom, Excise & Service Tax Tribunal
Kirloskar Sytems Ltd vs Commissioner Of Service Tax - ... on 20 February, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No . 20248 / 2014 Application(s) Involved: ST/Stay/27127/2013 in ST/26800/2013-DB Appeal(s) Involved: ST/26800/2013-DB [Arising out of Order-in-Appeal No. 73/2013 dated 07/03/2013 passed by Commissioner of Central Excise (Appeals) BANGALORE] Kirloskar Sytems Ltd., Embssy Star, No.8, Palace Rod, Vasanth Nagar, BANGALORE KARNATAKA-560052 Appellant(s) Versus Commissioner of Service Tax - BANGALORE-SERVICE TAX 1ST TO 5TH FLOOR, TTMC BUILDING,above BMTC BUS STAND,DOMLUR BANGALORE, KARNATAKA-560071 Respondent(s)
Appearance:
Mr. A. SIVAKUMAR ADV #1/1, 7TH MAIN, 2ND STAGE, INDIRANAGAR, BANGALORE-560 038 For the Appellant Mr. A.K. Nigam,A.R. For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 20/02/2014 Date of Decision: 20/02/2014 Order Per : B.S.V.MURTHY CENVAT credit of Rs. 8,18,074 has been denied being the service tax paid on real estate agents service for the period prior to June 2007 on the ground that during the relevant period renting of immovable property service was not in existence and therefore the appellant was not eligible for the credit. The service tax of Rs. 4,92,375/- has been demanded on the ground that the assessee should have paid service tax on movable fixtures/movable assets which were transferred to the tenants for using in the facility.
2. After hearing both sides, we find that the appeal itself can be decided. Accordingly, the requirement of predeposit is waived and appeal is taken up for final decision.
3. As regards the denial of CENVAT credit, it is the claim of the appellant that they were paying service tax on maintenance charges received from their tenants prior to the renting of immovable property service came into existence and therefore credit was admissible in respect of real estate agents services also. It was also mentioned that real estate agents service is one of the services covered under Rule 6(5) of CENVAT Credit Rules 2004. We find that this argument is acceptable and appropriate.
4. As regards the service tax, we find that the learned adjudicating authority had come to the conclusion that service tax is to be paid because of the explanation in the definition. There is no discussion as to which explanation he was referring to. On going through the definition, we could not find any relevant explanation to come to this conclusion. For ready reference, explanation to the definition of renting of immovable property service is reproduced below:
Explanation [1]. For the purposes of this clause, for use in the course or furtherance of business or commerce includes use of immovable property as factories, office buildings, warehouses, theatres, exhibition halls and multiple-use buildings.] [Explanation 2. For the removal of doubts, it is hereby declared that for the purposes of this clause renting of immovable property includes allowing or permitting the use of space in an immovable property, irrespective of the transfer of possession or control of the said immovable property;]
5. Commissioner (Appeals) further took a totally new ground. He has stated that these are all fixtures to earth and therefore cannot be removed and have to be considered as immovable assets. Further he has not revealed the concern on the basis of which he has come to the conclusion . We were also not able to find the concern for coming to such conclusion. The original authority had relied on trial balance sheet and financial statements to decide that these are movable fixtures. In the absence of any basis to show that the assets for which service tax is being demanded was movable, we are unable to uphold the impugned order. In the result the impugned order is set aside and appeal is allowed with consequential relief if any to the appellants.
(Order dictated and pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER Pnr...
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