Cenvat Credit is allowable on Works Contract Service, Construction Service, Consultancy, and Fire Protection Service used for Construction of Immovable Property: CESTAT [Read Order]

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Hyderabad has held that Cenvat credit is allowable on works contract service, construction service, consultancy, and fire protection service used for the construction of an immovable property.

The appellant, M/s. VITP Private Limited is engaged in the business of developing IT Parks and other industrial and commercial places which are subsequently given for rent to a wide spectrum of industries. During the assessment proceedings, the Assessing Officer denied Cenvat Credit on the input services used for the construction of the immovable property and used for promoting their premises for better lease opportunities.

The counsel for the appellant by relying on the decision of the Tribunal in Regency Park Property Management Services Pvt. Ltd. v. CST submitted that the Cenvat credit has been correctly availed on input services like works contract service, construction service, consultancy, and fire protection service used in the construction of immovable property as per Rule 2(l) of Cenvat Credit Rules, 2004.  

The Coram of Mr. P. K. Choudhary, Member (Judicial) and Mr. P. V. Subba Rao, Member (Technical) by relying on the decision of Supreme Court decision in has held that “we are inclined to allow the Cenvat credit of input services is availed by the Appellant for construction of immovable property which was further let out to various customers”. The Tribunal, with respect to the eligibility of Cenvat credit on event management services held that “we find that Rule 2(l) of the Cenvat Credit Rules, 2004 doesn’t exclude any such service from the eligibility of availing of Cenvat credit as these expenses have been incurred in the course of furtherance of business and are thus business promotion expenses and the same is eligible as Cenvat credit in our considered view.”.

Mr. S. Tirumalai and Mr. A. Rangadham appeared on behalf of the appellant and respondent respectively.

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