2013 (3) TMI 733 - AT - Service Tax

Summary

Issues involved:
The judgment deals with waiver of pre-deposit of service tax demands confirmed against the applicants under various categories including 'construction service', 'commercial or industrial construction service', 'construction of complex service', 'construction of residential complex service', and 'renting out immovable property service'.

Construction of Complex Service:
A demand of Rs. 20,23,911/- was confirmed under 'construction of complex service' for housing tenements constructed for Nagpur Improvement Trust (NIT) for the period 2005-2010. The applicants argued that since NIT leased the units to poor individuals, the demand was not sustainable. Citing the explanation to Section 65(91a) of the Finance Act, 1994, the Tribunal found merit in the applicants' case and granted 100% waiver of pre-deposit for this demand.

Commercial or Industrial Construction Service:
A demand of Rs. 6,75,573/- was confirmed under 'Commercial or Industrial Construction Service'. The applicants contended that they undertook construction activities on land leased from the Municipal Corporation, and as they themselves did the construction without providing services to others, they were not liable to pay service tax. The Tribunal agreed with the applicants' submission and granted 100% waiver of pre-deposit for this demand as well.

Construction of Residential Complex Service:
Another demand of Rs. 2,40,729/- was confirmed for construction of residential complex services provided to buyers. The applicants argued that since the provision for levy of service tax came into effect after the period in question, the demand was not sustainable. Acknowledging this, the Tribunal granted 100% waiver of pre-deposit for this demand.

Construction of Residential Complex for MHADA:
A demand of Rs. 1,28,189/- was confirmed for construction of residential complex for MHADA. The applicants contended that as the complex had below 12 residential units, it did not fall under the definition of a residential complex, making them not liable for service tax. Accepting this argument, the Tribunal granted 100% waiver of pre-deposit for this demand.

Renting Out Immovable Property Service:
A demand of Rs. 15,53,841/- was confirmed for renting out immovable property service. The applicants had already paid Rs. 9,16,400/-, which was deemed sufficient in compliance with relevant sections. Therefore, the Tribunal waived the pre-deposit of the balance amount of service tax, interest, and penalty.

Commercial or Industrial Construction Service to MTDC and Railway:
A demand of Rs. 9,83,532/- was confirmed for construction services to MTDC and Railway. While a portion was not disputed, the applicants contested the part related to MTDC, claiming that construction of tourist complexes leased by MTDC did not attract service tax. The Tribunal found the defense insufficient for 100% waiver and directed the applicants to deposit Rs. 2,50,000/-.

In conclusion, the Tribunal directed the applicants to make a pre-deposit of Rs. 3,61,121/- within four weeks. Upon this deposit, pre-deposit of the remaining amounts of service tax, interest, and penalties was waived, with recovery stayed during the appeal's pendency. Compliance was to be reported by 26-4-2013.