2010 (11) TMI 449 - AT - Service Tax

Waiver of pre-deposit - Renting of Immovable Property - The appellants had leased out their open plot near Godown to various companies and provided electricity - The appellant in this case was providing Storage and Warehousing Services and discharging the service tax liability thereon - The appellant has rented out the vacant land adjacent to their premises for storage and warehousing in emergency situation - Prima facie, this activity may not fall under the category of Renting of Immovable Property - Hence, waiver of pre-deposit. Management, Maintenance or Repair Services - The agreement entered by the appellant with client is for the activity of operation and maintenance of mud plant wherein the appellant mixes certain materials in the mud plant of client - Prima face this activity of operation and maintenance of mud plant may not get covered under Management, Maintenance or Repair Service - Hence, waiver of pre-deposit.

Summary

Issues involved:
- Service tax liability on 'Renting of Immovable Property'
- Service tax liability on 'Commercial or Industrial Construction Services'
- Service tax liability on 'Rent-a-Cab Services'
- Service tax liability on 'Management, Maintenance & Repair Services'
- Prima facie case for waiver of pre-deposit of the amounts involved

Analysis:

Service tax liability on 'Renting of Immovable Property': The appellant had leased out vacant land near a godown to various companies and provided electricity in the area, leading to a demand for service tax under 'Renting of Immovable Property Services'. However, the appellant argued that renting vacant land does not fall under this category. The Tribunal noted that vacant land, regardless of facilities, is excluded from this service as per Budget 2007-2008 and a clarification by the Central Board of Excise & Customs. The appellant primarily provided 'Storage and Warehousing Services' on the land, which may not qualify as 'Renting of Immovable Property'. Therefore, a prima facie case for waiver of pre-deposit of this amount was established.

Service tax liability on 'Commercial or Industrial Construction Services' and 'Rent-a-Cab Services': The appellant was also facing demands for service tax on these services, which were considered minor compared to the primary issue of 'Renting of Immovable Property Services'. The Tribunal did not delve deeply into these aspects as the primary focus was on the renting issue.

Service tax liability on 'Management, Maintenance & Repair Services': The appellant was contracted to operate and maintain a mud plant for another company. The authorities had categorized this as 'Management, Maintenance & Repair Services', but the appellant argued that the operation and maintenance were intertwined and did not constitute separate services. The Tribunal agreed that the activity of operating and maintaining the mud plant may not fall under this service category, establishing a prima facie case for waiver of pre-deposit of this amount as well.

Prima facie case for waiver of pre-deposit of the amounts involved: After considering submissions from both sides and perusing the records, the Tribunal found that the appellant had made out a prima facie case for waiver of pre-deposit of the amounts involved in the service tax liabilities for 'Renting of Immovable Property' and 'Management, Maintenance & Repair Services'. Consequently, the application for waiver was allowed, and recovery of the amounts was stayed pending the appeal's disposal.