2013 (10) TMI 537 - AT - Service Tax

Reimbursement Expenses Renting of Commercial Property - Held that - The reimbursement expenses received by the appellant and including the same for discharging the service tax liability may not arise as the Hon ble High Court of Delhi has struck down the Valuation Rules in the case of INTERCONTINENTAL CONSULTANTS AND TECHNORATS PVT. LTD. Versus U. O. I. & ANR. 2012 (12) TMI 150 - DELHI HIGH COURT - As regards the claim of which was demanded as service tax was on renting of Commercial Property - the appellant himself, in their records had indicated the amount received as commission - the issue needs to be considered in depth which can be done only at the time of final disposal of the appeal. Partial stay granted.

Summary

Issues:
Waiver of pre-deposit of service tax, interest, and penalties under Finance Act, 1994.

Analysis:
The appellant filed a stay petition seeking the waiver of pre-deposit of an amount confirmed as service tax, interest, and penalties under various sections of the Finance Act, 1994. The appellant had already accepted and deposited a portion of the amount but contested the remaining balance. The Chartered Accountant representing the appellant argued that a portion of the balance amount was attributable to reimbursement of electricity and water charges, while the rest was for renting a commercial property. On the other hand, the departmental representative contended that the amount claimed for renting commercial property was actually shown as commission received in the appellant's books of account.

The Tribunal noted that the reimbursement expenses received by the appellant, including for discharging the service tax liability, might not be applicable due to the High Court of Delhi striking down the Valuation Rules in a specific case. Regarding the amount claimed for renting a commercial property, since the appellant had indicated in their records that it was received as commission, the Tribunal decided that a detailed consideration of this issue would be necessary at the final disposal of the appeal. Consequently, the Tribunal directed the appellant to deposit a specific amount within a specified timeframe and report compliance, after which the application for waiver of pre-deposit of the remaining balance was allowed, and recovery was stayed until the appeal's disposal.

In conclusion, the Tribunal addressed the issues raised by the appellant regarding the waiver of pre-deposit of service tax, interest, and penalties under the Finance Act, 1994. The Tribunal considered the arguments presented by both parties, clarified the nature of the amounts in question, and provided a procedural direction for the appellant to comply with before further consideration of the appeal.