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Mirah Hospitality & Food Solutions Pvt. Ltd V/S Commr. of C. Ex., Pune

    Final Order No. A/422/2013-WZB/C-I (CSTB) and S/320/13-WZB/C-I (CSTB) in Application No. ST/Stay/2666/2012-Mum in Appeal No. ST/753/2012-Mum
    Decided On, 25 February 2013
    At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai
    By, THE HONORABLE JUSTICE: P.R. CHANDRASEKHARAN
    By, MEMBER AND THE HONORABLE JUSTICE: ANIL CHOUDHARY
    By, MEMBER
    For Petitioner: Puloma Dalal, CA And For Respondents: S.G. Dewalwar, Addl. Commissioner AR


Judgment Text

1. The appeal and stay application are directed against Order-in-Original No. 25/RKS/ST/P-I/2012, dated 23-8-2012 passed by Commissioner of Central Excise, Pune. The appellant M/s. Mirah Hospitality & Food Solutions Pvt. Ltd., Pune, formerly known as M/s. Twinkle Hospitality Pvt. Ltd., were providing the services of renting of immovable property to company M/s. Encore Hotels Pvt. Ltd., Malad, Mumbai, during the period June 2007 to March 2010 and also undertook supply of tangible goods for use. The department issued a show cause notice under the category of "Renting of Immovable Property" in respect of renting/leasing activity. In respect of tangible goods supplied such as kitchen equipments, appliances, etc. service tax was demanded under the category of "supply of tangible goods for use" service. A service tax demand of ` 65,97,432/- was made under the renting services and the demand of ` 25,66,027/- was made under the "supply of tangible goods for use" service. The appellant contested the notice and submitted that they have paid an amount of ` 15,77,089/- in cash towards the renting services and another amount of ` 50,20,343/- was paid from the Cenvat credit account wherein credit was taken on the input services availed by them in respect of output services provided. As regards the service demand on supply of tangible goods for use, the appellant contested that they had discharged VAT liability on the same and therefore, service tax is not payable. The adjudicating authority confirmed the demands on the ground that the appellant did not produce any valid documents for the availment of Cenvat credit and therefore, the appellant was not entitled for the Cenvat credit. Similarly, in respect of supply of tangible goods also, the appellant did not produce any documents evidencing payment of taxes. In these circumstances, the adjudicating authority confirmed the demand along with interest thereon and also imposing a penalty under Section 78 of the Finance Act, 1994. Hence, the appellant is before us.

2. The ld. Consultant for the appellant submits that the premises rented by them to M/s. Encore Hotels Pvt. Ltd., Malad, Mumbai, was the premises which they themselves have taken out on lease from various parties and these parties have charged service tax and therefore, they are rightly entitled for availing Cenvat credit of the service tax paid on the rent paid by them. Similarly, in the case of kitchen equipments, furniture, etc. on which they have received consideration, it is submitted that they have discharged VAT liability and therefore, they are not liable to pay service tax. However, the Consultant submits that none of the relevant documents were produced before the Adjudicating Authority and now they are willing to produce the same and therefore, the matter need to go back to the Adjudicating Authority for consideration afresh. She also relies on the Board's Circular No. 334/1/2008-TRU, dated 29-2-2008 wherein it was clarified by the Board that "supply of tangible goods for use" does not cover transaction leviable to VAT/Sales Tax as "deemed sale of goods" is not covered under the scope of said services. This is a matter to be decided based on the fact which could be ascertained from the facts whether the VAT/sales tax has been paid or not.

3. The ld. Commissioner appearing for the revenue submits that no evidence was led before the adjudicating authority as to the entitlement to the Cenvat credit, claimed to have been utilised in the rendering of the input service. Further, no evidence has been produced before the adjudicating authority with respect to the claim that the appellant had discharged VAT liability on the tangible goods supplied by them. In these circumstances, he prays for putting the appellant to terms.

4. We have carefully considered the submissions made by both the sides.

4.1 From the records, we observe that the appellant's claim with regard to entitlement of Cenvat credit and non-payability on the service tax on the tangible goods supplied for use was not substantiated with documentary evidences before the adjudicating authority. This position has also been conceded by the Consultant for the appellant. In these circumstances, the matter has to go back before the adjudicating authority for consideration afresh on the eligibility of Cenvat credit as also on the payability of the service tax on the tangible goods supplied for use. Accordingly, we direct the appellant to submit before the adjudicating authority within 30 days from today all the evidences which they want to rely on in support of their claim for entitlement of Cenvat c

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redit as also the exclusion from payment of service tax on tangible goods supplied for use. On submission of these evidences, the adjudicating authority shall consider the matter afresh and pass a speaking order after hearing the appellants. If the appellant fails to submit documentary evidences in support of their claim, the adjudicating authority shall be at liberty to decide the matter in accordance with the law on the basis of evidence available on record. Thus, the appeal is allowed by way of remand.
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