Customs, Excise and Services Tax Appellate Tribunal (CESTAT): Anil Choudhary (Judicial Member) allowed an appeal which involved the issue as to whether appellant have rightly utilised the cenvat credit for payment of service tax, and whether the same tax can again be demanded.
Appellants were engaged in providing construction/works contract services and renting of immovable property services. During 2011 to 2015, appellants “constructed mall (self owned) at Bulandshahar for the purpose of renting of shops”. The appellant took cenvat credit of Rs.19,76,562/- during construction and Rs.45,45,465/- after completion, totalling Rs.65,22,027/-. Appellant also constructed one building in Noida for M/s.Fiza Services (P) Ltd. on contract value of Rs.91.68 lacs. Appellants disclosed and paid service tax liability of Rs.4,40,105/- under Works Contract Service for the period January, 2015 to September, 2015.
Appellants availed cenvat credit of service tax paid on various services such as civil work, plumbing work, architecture fees, etc. used in construction of mall. The total credit availed on such services was Rs.65,22,027/-. Appellants also availed credit of Rs.41,955/- on input services used for rendering works contract services to M/s.Fiza Services (P) Ltd. which was not in dispute.
Consequent to audit, show cause notice proposed to deny cenvat credit Rs.65,22,027/- relating to input services of mall, and also demanded Rs.3,98,150/- (Rs.4,40,105 – Rs.41,955), as credit wrongly utilised for payment of service tax. It also proposed to impose penalties and demand interest. During adjudication, appellants reversed credit of Rs.19,76,562/- taken on civil work etc., and contended that the balance credit pertains to input services availed after completion of the construction of mall. On appeal, the Commissioner (Appeals) held that service portion of work contract (for construction work) is specifically excluded from the ambit of input service, but there is no restriction with regard to other input services availed for construction of mall.
The Tribunal found that the Department never issued any show cause notice for disallowance of cenvat credit taken, which has been disclosed in the Returns filed before the Department and further, proper records were maintained. It was further found that the appellant has rightly utilised this accumulated cenvat credit for payment of output service tax of Rs.3,98,150/-, which has been objected to by the Revenue and further demand on this score is set aside. Tribunal held that extended period of limitation was not attracted in the facts and circumstances as the issue being wholly of interpretation. Accordingly, penalties imposed under Rule 15 of CCR as well as under Section 78 of the Finance Act were set aside. The appeal was allowed.[MMR Infrastructure Developers (P) Ltd. v. Commr. Of CGST, 2021 SCC OnLine CESTAT 2707, decided on 02-11-2021]