2013 (11) TMI 1254 - AT - Service Tax

Waiver of pre deposit - Renting of Immovable Property Service - Held that - amount pertains to renting , which was provided prior to 1-6-2007 but payment was received after 1-6-2007 - Waiver of pre deposit on account of the Renting of Immovable Property Service granted, during the pendency of the appeal - Stay granted. Real Estate Agency Service - Held that - it is a transaction, where the applicants have intended to purchase the property and later, they did not intend to purchase the same but the consideration was received from relinquishment of the title in the property, which may not amount to service. Accordingly, the applicants have made out a prima facie case of waiver of pre-deposit of the entire amount confirmed against them under the category of Real Estate Agency Service , we grant such waiver and stay recovery thereof during the pendency of the appeal - Stay granted. Business Auxiliary Service - Held that - it is a transaction for sale of shares of the company, therefore, the assessees are not liable to pay service tax under the category Business Auxiliary Service . Accordingly, we waive the requirement of pre-deposit of the entire service tax, interest and penalty and stay recovery thereof during the pendency of the appeal - Stay granted. Denial of CENVAT credit - Availment of CENVAT credit on Construction of Immovable Property prior to 1-6-2007 but on the premise that the Renting of Immovable Property Service has come into force only with effect from 1-6-2007 - Held that - when the applicants took the input services at that time Renting of Immovable Property Service was not under the tax net. The applicants have not made out a case for 100% waiver of pre-deposit of the entire amount of service tax, interest and penalties on this count - Stay granted partly.

Summary

Issues:
1. Renting of Immovable Property Service
2. Real Estate Agency Service
3. Business Auxiliary Service
4. Denial of CENVAT credit

Renting of Immovable Property Service:
The demand pertains to the introduction of the service from 1-6-2007. The applicants paid a significant amount during investigation. They seek waiver due to payments received post 1-6-2007, including rent and deposits for electricity connection. The tribunal acknowledges the need to assess these aspects during the final hearing. Consequently, it waives the pre-deposit requirement of Rs. 94,86,117 for this service pending the appeal.

Real Estate Agency Service:
The applicants initially intended to purchase a property but withdrew due to a title dispute. Later, they relinquished their rights to another buyer. The Revenue asserts service tax liability on the consideration received. The tribunal finds the transaction more akin to a property sale than a service, thus granting a prima facie case for waiving the entire confirmed amount under this service during the appeal.

Business Auxiliary Service:
The applicants engaged in a joint venture, selling a share to a foreign company. The Revenue deems this as promoting the collaborator's brand in India, thus subject to service tax under Business Auxiliary Service. The tribunal views the transaction as a share sale, not falling under the service tax purview. Consequently, it grants a waiver of the entire service tax, interest, and penalty during the appeal.

Denial of CENVAT credit:
The denial of CENVAT credit relates to input services for constructing immovable property before 1-6-2007. The denial is based on the introduction of Renting of Immovable Property Service post that date. The tribunal disagrees with the argument, stating that the service was not taxable when the input services were procured. It directs the applicants to pre-deposit 50% of the denied CENVAT credit within eight weeks, with the remaining amount waived and recovery stayed pending the appeal.

This judgment by the Appellate Tribunal CESTAT CHENNAI addressed various issues concerning service tax demands, waivers, and CENVAT credit denials across different service categories. The tribunal carefully analyzed each situation, considering the timing of services, nature of transactions, and applicability of service tax laws. Notably, waivers were granted for Real Estate Agency Service and Business Auxiliary Service due to the nature of transactions differing from traditional taxable services. The decision showcases a meticulous examination of facts and legal provisions to ensure fair treatment and compliance with tax regulations.