Customs, Excise and Services Tax Appellate Tribunal (CESTAT): A Coram of Anil Chaudhary (Judicial Member) and C.L. Mahar (Technical Member), allowed an appeal filed aggrieved by the penalties imposed on the service tax and disallowance of cenvat credit.

The appellant had set up a Shopping Mall cum Entertainment World known as ‘Treasure Island’, which is in operation since December, 2005 after completion of the construction. The appellant is registered with the Service Tax Department for various services including Renting of Immovable Property, Selling of space or time slots, Maintenance or repairs etc. They also availed input service credit with respect to various input service received for rendering the output services. The appellant have been filling their returns regularly. It appeared to Revenue that appellant have been discharging service tax on receipt basis, whereas w.e.f. 01.04.2011, service tax is liable on the billed amount, thus, there appears to be some short payment of service tax. It appeared to Revenue that the said amount of cenvat credit amounting to Rs 49, 91,539 is not admissible to appellant, as cenvat credit is admissible only when such input service/ inputs are used in providing any output service. It appeared that there is non-payment of service tax for renting of immovable property service. It was also alleged that inspite of repeated requisition, appellant have failed to submit details of the credit taken, gross amount received towards taxable services etc.

The Tribunal found that the appellant is entitled to input service credit of Rs 49, 91,591 in dispute. All the services in question were eligible input services for rendering of output services. There was no dispute as regards receipt of any of the input services. In regards to the demand of service tax the Tribunal held that said amount was also not tenable as the said demand was prima facie raised under the impression that the appellant was not entitled to cenvat credit of Rs 49,91,539/. Further, they found that the appellant have deposited the service tax as per their calculation and it was also evident from the calculation chart and the payment challans brought on record vide miscellaneous application, which was earlier allowed. The Tribunal allowed the appeal directing the adjudicating authority to verify the challans for payment of service tax along with calculation as furnished by the appellant before this Tribunal.[Entertainment world Developers (P) Ltd. v. Commr., Customs, CE & ST, 2020 SCC OnLine CESTAT 204, decided on 15-10-2020]

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