The Hyderabad CESTAT has dropped the excise duty demand on MS items used for fabrication of capital goods and for supporting structures.
The issue involved in this Appeal is whether the Court below has rightly dropped the demand in respect of Cenvat credit availed by the Respondent/ Assessee on MS items used for fabrication of capital goods and for supporting structures credit availed on input services used for erection and commissioning of machinery and credit availed on certain inputs.
The department contended that right to use immovable property is leviable to service tax under renting of immovable property service. Commercial or industrial construction service or works contract service is an input service for the output namely immovable property. Immovable property is neither subjected to central excise duty nor to service tax. Input credit of service tax can be taken only if the output is a ‘service’ liable to service tax or a ‘goods’ liable to excise duty. Since immovable property is neither ‘service’ or ‘goods’ as referred to above, input credit cannot be taken.
The assessee states that the same issue has been considered by this Tribunal in three Appeals relating to the subsequent period. The period involved in this Appeal is January, 2008 to June, 2008 and the three earlier Appeals relating to the period September, 2008 to June, 2010, which has been categorically held in favor of the Assessee for the same activity and the services received, that they are entitled to Cenvat credit.
The CESTAT dismissed the appeal of the department.
Case Name: Commissioner of Central Tax Tirupati-GST V/S Bharati Cement Corporation Pvt Ltd