RULE 2(I) – CENVAT CREDIT RULES, 2004 – CENVAT CREDIT – INPUT SERVICE:

Assessee availed construction service and works contract Service on construction of warehouse. It availed CENVAT credit of Service Tax paid on above services and utilized same for payment of Service Tax on renting of immovable property service. Adjudicating Authority denied said credit. Commissioner (Appeal) dismissed assessee’s appeal for failure to deposit 50 % of demand. Since warehouse itself was going to be rented out, prima facie, assessee was eligible for Cenvat Credit of Service Tax paid on input service utilized for building said property. Therefore, matter was to be remanded to Commissioner (Appeal) to decide appeal on merits without insisting on any pre-deposit on assessee.

Mahalaxmi Warehouse & Allied Industries V. Commissioner of Central Excise, Rajkot – CESTAT, AHMEDABAD BENCH.