VENUS INVESTMENTS Vs. COMMISSIONER OF CENTRAL EXCISE, VADODARA

JUDGEMENT

(1.) M /s. Venus Investments, Vadodara are engaged in providing taxable services falling under category of renting of immovable property services. On verification it was detected by the department that they have wrongly availed Cenvat credit of Rs. 5,05,974/ - under category of commercial or industrial construction services as input service for construction of an immovable property. The Revenues contention was that such services is neither input service for output service nor immovable property service is service for goods in terms of Rule 2(A)(i) read with Rule 6 of Cenvat Credit Rules, 2004. The original adjudicating authority disallowed the cenvat credit and ordered recovery of an amount of Rs. 2,96,892/ - along with interest and imposed penalty. The present appeal is against this order.

(2.) IT was submitted by the appellants that the original adjudicating authority placed reliance on C.B.E. and C. Circular No. 98/1/2008 -S.T., dated 4 -1 -2008 which clarified that such input service of construction is to be provided for output service i.e. building which is neither dutiable nor taxable under service tax. They argued that the clarification is valid because such premises are to be used for providing taxable services. They placed reliance in the judgment of the Honble Supreme Court in the case of Ratan Melting and Wire Industries - 2008 (231) E.L.T. 22 (S.C.) = 2008 (12) S.T.R. 416 (S.C.). It was the contention of the department that the provisions of the Act do not provide for levy of service tax on the renting of immovable property as such and does not treat renting out of immovable property as a service. The service could be rendered to any person provided it was in relation to the renting of the property and not to the person who takes the property on rent.

(3.) SHRI S.R. Dixit, learned counsel appearing on behalf of the appellant invited attention to the provisions of Rule 2(l) which are as follows :