M/S. Gem Motors vs Commissioner Of Customs, Central ...

[Arising out of Order-in-Appeal No.CMB-CEX-000-APP-239-13, dated 07-08-2013 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Coimbatore]

M/s. GEM MOTORS APPELLANT

Versus

COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, COIMBATORE RESPONDENT

Appearance:

For the Appellant Shri M. Saravanan, Cons.

For the Respondent Shri L. Paneerselvan, AC (AR)

CORAM:

Honble Shri D.N. Panda, Judicial Member

Date of hearing/decision 22-09-2015

FINAL ORDER NO. 41259 / 2015

1.1 It is submitted by the appellant that an earmarked space was used for the purpose of providing taxable service of servicing of vehicles. Appellant specifically brings out that page 7 of the Lease Deed prescribed the sq.ft. area, for the place used for that purpose. According to him, there is no dispute on the claim of rent payable on the occupied area to provide servicing of motor vehicle which is taxable. But Revenue says that the formula prescribed by Rule 6 (3) of Cenvat Credit Rules, 2004 shall be applied to determine the quantum of rent and service tax payable thereon for the purpose of grant of input service credit.

1.2 He further submits that both the authorities below committed error in law without examining the Lease Deed which entitled the appellant to avail a part of leased premises for providing taxable service. Therefore, the rent payable according to the Lease Deed shall entitle the appellant to service tax credit in respect of rent allocable on the basis of sq.ft area specified for use in providing taxable service of servicing of motor vehicles. Revenue supports both the orders of the authorities below.

2. Heard both sides and perused the records.

3. Lease Deed in the Schedule of Property categorically brings out two categories of building (i) R.C. Roofing building and (ii) A.C. Roofing building leased to appellant. There is nothing on record to show A.C. Roofing building was not used for providing of motor vehicle service, when there was an earmarked area for that purpose apparent from the Lease Deed. This was the basic document to avail the space to carry out the servicing activity. Therefore, that cannot be ignored.

3. Rule 6(3) of Cenvat Credit Rules, 2004 prescribes a formula to quantify permissible Cenvat credit. When there is use of the common input without maintenance of account this rule applies. But here is a case the document specified type and are of the building used for respective purpose in terms of Schedule of Property appearing at page 8 of the Lease Deed. Therefore, there should not be confusion to allocate the area used to provide the taxable service and allow claim of Cenvat credit of service tax paid on rent paid in respect of that space used. In absence of any physical inspection report showing anything contrary to the claim, no suspicion or surmise shall deny the Cenvat credit of service tax suffered on rent paid by the appellant on the earmarked area to carry out taxable service.

4. Taking into consideration of the leased area used for providing taxable service, the relevant service tax paid in respect of lease rent for that area should be allowed as Cenvat credit.

5. Appeal is allowed.

6. In view of the confusion of the Authority as above, there shall not be any penalty.

(Dictated and pronounced in open court)

(D.N. PANDA) JUDICIAL MEMBER

ksr 28-09-2015

DRAFT Remarks

I II III

Date of dictation 22.09.2015

Draft Order - Date of typing 23.09.2015

Fair Order Typing 26.09.2015 28.09.2015

Date of number and date of dispatch 28.09.2015

3 ST/40253/2014