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Service Tax - Restoration and Renovation of Immovable Property

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Service Tax - restoration and renovation of immovable property – appellant availed abatement of 67% in the taxable value - The Revenue contends that the services are liable to be taxed under the category of construction service/maintenance of immovable property service for the respective period - recovery in terms of Rule 14 of CCR, 2004 - demand of 8% on exempted services due to non-maintenance of separate accounts on common input services

HELD – assessee were not providing these services in relation to new buildings or structures hence after introduction of the new services, i.e., ‘Maintenance or Repair Service’ / ‘Management, Maintenance or Repair Service’ such services provided in respect of buildings which were under running conditions were unambiguously covered under the ambit of this new service.

In case any repairing work has been done with such maintenance work the same was incidental or ancillary to such maintenance work hence the services provided by the assessee were covered under the purview of ‘Maintenance or Repair Service’ / ‘Management, Maintenance or Repair Service’ - all the grounds raised by the appellant regarding the nature of service and the correct classification have been duly addressed by the Original Authority - with reference to payment of 6% / 8% on the value of exempted services in terms of Rule 6 (3) (i) of the CCR, 2004, the appellants have deposited the whole of Cenvat credit alongwith interest for delayed payment.

As such, it should be considered that they have not availed such credit to attract the rigorous of Rule 6 (3) of Cenvat Credit Rules - the demand for the said amount for violation of Rule 6 (3) is not sustainable. The penalty relevant to the said dispute is also liable to be set aside - the appeal filed by the appellant is dismissed except for setting aside the demand under Rule 6 (3) of CCR, 2004

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Guest Tuesday, 17 September 2019

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