Custom, Excise & Service Tax Tribunal
Oberon Edfices & Estates Pvt Ltd vs Cochin-Cus on 1 September, 2023
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 26993 of 2013
[Arising out of Order-in-Original No. 43, 44 & 45/2013-ST dated 27.03.2013 passed
by the Commissioner of Customs, Central Excise & Service Tax, Cochin]
Oberon Edifices & Estates Pvt Ltd ......Appellant
Oberon Mall, NH By-Pass, Edappally,
Kochi - 682024, Kerala
VERSUS
Commissioner of Central Excise, Customs ......Respondent
& Service Tax, Cochin C R Building, I. S. Press Road, Cochin - 682018 with Service Tax Appeal No. 26994 of 2013 [Arising out of Order-in-Original No. 43, 44 & 45/2013-ST dated 27.03.2013 passed by the Commissioner of Customs, Central Excise & Service Tax, Cochin] Oberon Edifices & Estates Pvt Ltd ......Appellant Oberon Mall, NH By-Pass, Edappally, Kochi - 682024, Kerala VERSUS Commissioner of Central Excise, Customs ......Respondent & Service Tax, Cochin C R Building, I. S. Press Road, Cochin - 682018 and Service Tax Appeal No. 26995 of 2013 [Arising out of Order-in-Original No. 43, 44 & 45/2013-ST dated 27.03.2013 passed by the Commissioner of Customs, Central Excise & Service Tax, Cochin] Oberon Edifices & Estates Pvt Ltd ......Appellant Oberon Mall, NH By-Pass, Edappally, Kochi - 682024, Kerala VERSUS Commissioner of Central Excise, Customs ......Respondent & Service Tax, Cochin C R Building, I. S. Press Road, Cochin - 682018 Page 1 of 7 ST/26993,26994,26995/2013 APPEARANCE:
Present for the Appellant: Sh. Sherry Samuel Oommen, Advocate Present for the Respondent: Sh. P. Saravana Perumal, Authorized Repres.
CORAM:
HON'BLE Dr. D. M. MISRA, MEMBER (JUDICIAL) HON'BLE Mr. PULLELA NAGESWARA RAO, MEMBER (TECHNICAL) FINAL ORDER NO. 20922-20924/2023 DATE OF HEARING: 01.09.2023 DATE OF DECISION: 01.09.2023 PER D. M. MISRA These appeals are filed against the Order-in-Original No. 43, 44 & 45/2013-ST dated 27.03.2013 passed by the Commissioner of Customs, Central Excise & Service Tax, Cochin Commissionerate.
2. Briefly stated facts of the case are that the appellants are engaged in providing output service i.e. 'Renting of Immovable Property Services'. They have availed CENVAT Credit on various input services used or in relation to providing the output services. On the basis of Circular No. 98/1/2008-ST dated 04.01.2008, three show cause notices were issued to the appellants for different periods alleging that since the service of 'Renting of Immovable Property Services' being the right to use service, hence credit availed on various input services are not admissible. It is also alleged in the Show Cause Notice No. 61/2010 dated 12.04.2010 that the appellants had provided sale of space or time for advertisement service but failed to discharge service tax on the same. The demands Page 2 of 7 ST/26993,26994,26995/2013 thus issued on adjudication, confirmed by the learned Commissioner.
Hence, the present appeals.
3. At the outset, the learned Advocate for the appellants submits that the issue of admissibility of CENVAT Credit on various input services used for providing 'Renting of Immovable Property Services' is no more res-integra and covered by the judgment of this Tribunal in the case of Golflinks Software Park Pvt Ltd vs. Commissioner of Service Tax, Bangalore reported as MANU/CB/0040/2018 which has been upheld by the Hon'ble Karnataka High Court reported as 2023 (8) CENTAX 30 (KAR.). He further submits that the input services availed by the appellants being used for 'Renting of Immovable Property Services' is admissible to CENVAT Credit.
Further, he has submitted that even though they have pleaded before learned Commissioner providing details about liability of service tax relating to 'sale of space or time for advertisement service' during the period, however, the learned Commissioner has not considered their plea nor given any findings on the said issue. He prayed that the matter be remanded to the adjudicating authority for consideration of the said issue.
4. The learned A.R. for the Revenue reiterates the findings of the learned Commissioner. He submits that the appeal against the judgment of Hon'ble Karnataka High Court is pending before Hon'ble Supreme Court.
5. Heard both sides and perused the records.
6. The issues involved in present appeals for determination are :-
Page 3 of 7ST/26993,26994,26995/2013
(i) Whether CENVAT Credit on various input services used in providing the output service viz. 'Renting of Immovable Property Services' be admissible; (ii) Service Tax is leviable for providing taxable service namely 'sale of space or time for advertisement service' in one of the Show Cause Notice No. 61/2010 dated 12.04.2010.
7. The issue relating to admissibility of CENVAT Credit which was proposed to denied on the basis of Circular No. 98/1/2008-ST dated 04.01.2008 has been considered by this Tribunal in various judgments. This Bench in the case of Golflinks Software Park Pvt Ltd (supra), has observed as follows:
"7.1 Further, we find that the Andhra Pradesh High Court in the case of CCE Vs. Sai Sahita Storages (P) Ltd., 2011 (23) STR 341 (AP) has held that the inputs used for construction of a warehouse to provide storage and warehousing services would be available as CENVAT Credit.
The appellant submits that input services would also qualify as eligible services for the purpose of discharging the output tax liability on renting of immovable property. Further we find in the case of Varun Industries Vs. CCE, 2017 (49) STR 613 (T) it was held that input services used for construction of godown which was let out on rentals, were eligible for CENVAT Credit as the output service (renting of immovable property) was taxable. Further, we find in the case of Maharashtra Cricket Association Vs. CCE, 2016 (41) STR 833 (T), it has been held that architect and designed services used as input services to provide the output service of renting of immovable property were eligible services and CENVAT could not be disallowed applying the Board Circular dated 04.01.2008, Page 4 of 7 ST/26993,26994,26995/2013 which was contrary to statute law. This decision is squarely applicable to the appellant, more so as the very same circular was applied against the appellant by the respondent to deny CENVAT Credit.
7.2 Further, we find in the case of Oberoi Mall Ltd. Vs. CST. 2017 (47) STR 292 in which the Tribunal held that credit relating to input services used to construct mall for renting of immovable property, would be available as CENVAT to the appellant for paying output tax liability on renting of immovable property. Further, we find in the case of CCE Vs. Ashok Agencies 2016 941) STR 647 (T) in which it was held that various input services such as engineering consultancy, construction services, erection, maintenance and installation and banking services utilized as input services to provide renting of immovable property would be available as input services to provide renting of immovable property would be available as input services as they were required to bring out the edifice which was immovable property rented out. Further, we find in the case of Agricultural Product Market Committee Vs. CCE, 2013 (30) STR 558, in which the Tribunal held that credit on input services such as management, maintenance repair, advertising, telecommunications and insurance services used by the appellant for renting of godown (immovable property) was available to discharge the output tax liability. The impugned order of the Commissioner is wrong in law. Further, we find in the case of Navratna SG Highway Prop. Pvt. Ltd. Vs. CST, 2012 (28) STR 166 (T) it was held that various input services used to construct and rent immovable property would be available since without utilization of such services, construction of mall and renting thereof was not possible. This decision applies with full force and vigour to the appellant and the impugned order is manifestly illegal as it falls foul of the above ruling.
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8. Further, we find that the respondent has heavily relied upon the Circular dated 04.01.2008 which is contrary to the law cited supra. The Tribunal‟s decision eclipse this Circular which has been held to be contrary to statute law. The proceedings before the Commissioner are vitiated and have been hit by administrative consideration. The Apex Court in the case of Orient Paper Mills Ltd. Vs. UOI, 1978 (2) ELT J 345 (SC) held that Appellate Authority which exercised quasi-judicial power should not be influenced by departmental clarifications and Board Tariff Ruling while adjudicating the cases.
9. In view of the discussion above, we are of the considered opinion that the issue is squarely covered in favour of the appellant by various decisions relied upon cited supra and by following ratios of the said decisions, we set aside the impugned order by allowing the appeal of the appellant with consequential relief, if any."
We do not find reason not to accept the aforesaid findings of the Tribunal on the aforesaid issue as the said judgment has been approved by the Hon'ble Karnataka High Court. Accordingly, the impugned order denying CENVAT Credit on the various input services used in providing 'Renting of Immovable Property Services' is hereby set aside and the credit on this account is to be admissible.
8. On the second issue the demand against 'sale of space or time for advertisement', we find that the learned Commissioner has not recorded any findings on the said issue even though the appellants pleaded before him that levy of Service Tax on the said alleged service is unsustainable. In this circumstance, it is prudent to remand the matter to the adjudicating authority to examine the said issue.
Page 6 of 7ST/26993,26994,26995/2013 Accordingly, the matter is remanded to the adjudicating authority only to the extent of examining the issue of levy of service tax on 'sale of space or time for advertisement service' relating to Show Cause Notice No. 61/2010 dated 12.04.2010.
9. Appeals are disposed of as above.
(Dictated and pronounced in the open court) (D. M. MISRA) MEMBER (JUDICIAL) (PULLELA NAGESWARA RAO) MEMBER (TECHNICAL) RA_Saifi Page 7 of 7