The Customs, Excises, Service Taxes Appellate Tribunal (CESTAT) held that the Entertainment world Developers entitled to an input service credit of Rs. 49 Lakhs.
The appellant, M/s Entertainment world Developers Pvt. Limited has set up a Shopping Mall cum Entertainment World known as ‘Treasure Island’, which has been 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 services received for rendering the output services.
The revenue found that the appellant is discharging service tax liability for GTA as recipient of service, in cash.The whole amount of service tax liability was being discharged through utilisation of cenvat credit.
It appeared to Revenue that appellant have been discharging service tax on receipt basis, whereas service tax is liable on the billed amount, thus, there appears to be some short payment of service tax.
The show cause notice was adjudicated on the contest whereby the proposed disallowance of cenvat credit was confirmed along with equal amount of penalty. Further, service tax was demanded for Rs. 66,48,166 along with equal amount of penalty under Section 78 alongwith interest under Section 75.
The appellant urged that the definition of input service as amended, provides that the manufacturer or an output service provider is entitled to take cenvat credit of input services used directly or indirectly in relation to providing of output services and also includes various services specified therein.
The appellant further points out that reference to Circular No. 98/1/2008-ST is frivolous as the said circular is in respect to allowability of ‘construction services’ or ‘works contract service’ used for construction of immovable property, whereas the admitted fact is that the appellant has completed the construction and the Mall and is in operation since December, 2005.
The two-member bench of Anil Choudhary and C.L. Mahar held that the appellant is entitled to input service credit of Rs. 49,91,591 in dispute. All the services in question are eligible input services for rendering of output services. There is no dispute as regards receipt of any of the input services.
“We find that the appellant has deposited the service tax as per their calculation and is also evident from the calculation chart and the payment challans brought on record vide miscellaneous application, which was earlier allowed vide order dated 03.12.2019. We further find that Revenue have not pleaded that the VCES application filed by the appellant on 24.12.2013 for tax dues upto December, 2012 have been rejected,” the tribunal said.Subscribe Taxscan AdFree to view the Judgment