2011 (10) TMI 455 - AT - Service Tax

Waiver of pre-deposit - the services renting of immovable property were specifically introduced under Section 65(90a) with effect from 1-6-2007 and Supply of Tangible Goods Services were introduced from 16-5-2008 vide Section 65(105)(zzzzj) - Held that of definition of business support service and explanation attached thereto which clarifies expression infrastructural support services meaning thereby as inclusive of providing office alongwith other utilities and facilities which is not the case here - Petition is allowed

Summary

Issues:
1. Application to dispense with pre-deposit of service tax and penalties confirmed against the applicants/appellants for renting factory premises and machinery to clients.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi involved an application seeking to dispense with the conditions of pre-deposit of service tax and penalties amounting to Rs. 3,04,075/- confirmed against the applicants/appellants for the period 2006-07. The issue arose from the contention that by renting factory premises and machinery to clients, the appellants were providing infrastructural support services falling under business support services, making them liable to service tax. The penalties included a penalty under section 78 of the Finance Act, 1994, along with additional penalties under sections 77 and 76 of the same Act.

Upon hearing both sides, the Tribunal considered the services of "renting of immovable property" introduced under Section 65(90a) and "Supply of Tangible Goods Services" introduced under Section 65(105)(zzzzj) on specific dates. The Tribunal referred to precedents like Zee Telefilms Ltd. and BCCI, establishing that new entries for service tax imply non-coverage under prior existing service categories. Additionally, the definition of business support service and its explanation were reviewed, clarifying that "infrastructural support services" encompass providing office space and utilities, which did not align with the current case. Consequently, the Tribunal, at a prima facie stage, found merit in the appellant's argument and ruled in favor of allowing the stay petition unconditionally.

In conclusion, the judgment by the Appellate Tribunal CESTAT, New Delhi, under the direction of Ms. Archana Wadhwa, Member, analyzed the application to waive pre-deposit of service tax and penalties against the appellants for renting factory premises and machinery to clients. The decision was based on the interpretation of relevant service tax provisions, precedents, and the definition of business support services, ultimately leading to the grant of the stay petition in favor of the appellant.