Karnataka High Court
Commissioner Of Service Tax vs M/S Golflinks Software Park Pvt Ltd on 28 October, 2022
Author: P.S. Dinesh Kumar
Bench: P.S. Dinesh Kumar
C.E.A No.38/2019
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF OCTOBER, 2022
PRESENT
THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR
AND
THE HON'BLE MR. JUSTICE UMESH M. ADIGA
C.E.A No.38 OF 2019
BETWEEN :
COMMISSIONER OF SERVICE TAX
TTMC BUILDING, DOMLUR
BENGALURU-560 071
NOW REPRESENTED BY
THE COMMISSIONER OF
CENTRAL TAX
BENGALURU NORTH COMMISSIONERATE
HMT BHAVAN, GANGANAGAR
BENGALURU-560 032 ... APPELLANT
(BY SMT. K.R. VANITHA, ADVOCATE)
AND :
M/s .GOLFLINKS SOFTWARE
PARK PVT LTD.
EMBASSY POINT No.150
INFANTRY ROAD
BENGALURU-560 001 ... RESPONDENT
(BY SHRI. N. ANAND, ADVOCATE FOR
SHRI. B.G. CHIDANAND URS, ADVOCATE)
...
THIS CEA IS FILED UNDER SEC.35G OF THE CENTRAL
EXCISE ACT, 1944, ARISING OUT OF ORDER DATED
02.08.2018 PASSED IN FINAL ORDER NO.21081/2018
PASSED IN APPEAL No.ST/2573/2010-DB PRAYING TO
C.E.A No.38/2019
2
ANSWER THE SUBSTANTIAL QUESTIONS OF LAW FRAMED
THEREIN IN THE INTEREST OF JUSTICE OF EQUITY AND ETC.
THIS CEA, HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 26.08.2022, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY,
P.S.DINESH KUMAR J., PRONOUNCED THE FOLLOWING:-
JUDGMENT
This appeal by the Revenue challenging the final order No.21081 dated August 2, 2018 in Appeal No.ST/2573/2010-DB passed by CESTAT1, South Zonal Bench, Bengaluru has been admitted to consider the following question of law:
"Whether the finding recorded by the CESTAT that the respondent is eligible to take Cenvat credit on inputs/ inputs services used for construction of immovable property and utilize the same to discharge the service tax liability on output services namely, renting of immovable property service in view of Board's circular No.98/01/2008 ST dated 04.01.2008 issued vide F.No.345/6/2007 TRU, is perverse?".
2. Heard Smt. K.R. Vanitha, learned Advocate for the Revenue and Shri. N. Anand, learned Advocate for the assessee. 1 Customs, Excise & Service Tax Appellate Tribunal C.E.A No.38/2019 3
3. Brief facts of the case are, repondent, engaged in the business of renting immovable properties is registered under the Service tax. It availed the CENVAT credit on input services such as Architects Service, Construction Service, Management consultancy etc., to discharge the service tax and output services including renting of immovable property. Pursuant to an audit note, a show cause notice dated October 28, 2009 was issued alleging violation of Board Circular dated January 4, 2008. After considering assessee's reply, the proposal in the show cause notice was confirmed vide Order-in-Original dated August 31, 2010 passed by the Commissioner of Service tax holding that CENVAT credit was wrongly utilized and a demand was raised for Rs.9,04,89,039/-. In addition, interest and penalty were also imposed. On appeal by the assessee, the CESTAT has C.E.A No.38/2019 4 set-aside the order passed by the Commissioner. Hence, this appeal.
4. At the outset, Shri. N. Anand for the assessee submitted that the issue involved in this appeal has been decided in M/s. Millenia Realtors Pvt. Ltd. Vs. Commissioner of Central Excise2 and the said order has been accepted by the Revenue.
5. Smt. Vanitha for the Revenue, argued in support of the appeal reiterating the grounds stated in the Memorandum of appeal. She submitted that the Revenue has challenged orders passed by the CESTAT in M/s. Oberoi Mall Ltd., Vs. Commissioner of Service Tax, Mumbai3 and thus, the Revenue has not accepted the view taken by the Tribunal.
6. We have carefully considered rival contentions and perused the order passed by the CESTAT in M/s. Millennia Realtors Pvt. Ltd. The 2 2020- TIOL-435-CESTAT-BANG 3 2017 (47) STR 292 (Tri. Mumbai) C.E.A No.38/2019 5 assessee therein, was in the business of renting immovable properties and the issue involved was whether the assessee therein was entitled for CENVAT credit on the input and input services consumed or utilized in construction of the Commercial Complex. After considering various authorities, the Tribunal has held that the assessee was entitled to CENVAT credit both on inputs and input services utilized for the construction to be utilized as output service being renting of immovable property. It is not in dispute that the said order passed by the CESTAT, Bengaluru has not been challenged by the Revenue.
7. In view of the above, this appeal does not merit consideration for more than one reason. Firstly, Revenue has accepted the view taken by the Tribunal in M/s. Millennia Realtors. Secondly, assessee is admittedly in the business of renting immovable property. While constructing the C.E.A No.38/2019 6 immovable properties, assessee would have availed various services and paid input tax. The said building is used by the assessee in its business. Therefore, assessee must be entitled to avail the input services to discharge services on various output services.
8. In view of the above discussion, this appeal must fail. Hence, the following:
order
(a) Appeal is dismissed.
(b) The question of law is answered in favour of the assessee and against the Revenue.
No costs.
Sd/-
JUDGE Sd/-
JUDGE SPS