By TIOL News Service

AHMEDABAD, OCT 20, 2014: THE issue involved in these proceedings is whether CENVAT credit of capital goods, input and input services used for making of immovable property, which is further put to renting of immovable property service, will be admissible or not. Adjudicating authority under different Orders-in-Original held that such credit will be admissible as the inputs, capital goods and input services are availed in or in relation to creation of a property which is used for providing of output services i.e. renting of immovable properties. Adjudicating authority dropped the proceedings against the appellants. However, the same were reviewed by the Commissioner Central Excise & Customs, Vadodara-II under the Orders-in-Revision by holding that immovable property is neither service nor goods in view of the CBEC Circular No.98 /1/2008-ST dated 04.1.2008. Against these OIRs appellant has filed these appeals.

The Tribunal observed that so far as admissibility of CENVAT credit on inputs and input services used for creation of immovable property, which is subsequently subject to service tax under renting of immovable property, is concerned, the issue is no more res- integra as held by this bench in the case of Navratna S.G . Highway Prop. Pvt Limited.

The Tribunal noted that in the earlier case it was observed, the issue which was before the Hon'ble High Court of Andhra Pradesh was similar to the present one. The Hon'ble High Court of Andhra Pradesh considered the definition of the 'input' and 'input service' and took a view that using cement and TMT bars for construction of warehouse, the CENVAT credit on cement and TMT bars would be admissible.

Further, in the case of Agriculture Products Market Committee vs. CCE, Vadodara, also this Bench has held that CENVAT credit with respect to services used in construction of immovable property which is subject to service tax under renting of immovable property will be eligible for CENVAT credit.

In view of the above settled position of law appeals filed by the appellants are required to be allowed.

(See 2014-TIOL-2042-CESTAT-AHM)