2014 (1) TMI 1454 - AT - Service Tax

Stay application - Waiver of pre deposit - Demand of service tax - Renting of immovable property - Held that - individuals have entered into agreement with the bank undisputedly that the State Bank of India has given the rent cheques in individuals name and not in appellant associations name - appellant has made out a strong prima facie case for the waiver of pre-deposit of the amounts involved. Applications for the waiver of pre-deposit of the amounts involved are allowed and recovery thereof stayed till the disposal of appeals - Following decision of Dinesh K. Patwa Versus Commissioner of Service Tax 2012 (10) TMI 67 - CESTAT AHMEDABAD - Stay granted.

Summary

Issues:
1. Service tax liability on the association as a provider of service under the category of renting of immovable property.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad involved two stay petitions seeking the waiver of pre-deposit of a confirmed service tax liability. The issue at hand was the service tax liability on the association as a provider of service under the category of renting of immovable property. The Chartered Accountant representing the appellants argued that the association was not the primary party in the agreement with the State Bank of India, as the individual owners of the shop premises were the main parties. He pointed out that the rent cheques were issued in the individual owners' names, not in the association's name. The Chartered Accountant also referred to a previous order by the Bench where unconditional stay was granted in a similar case. On the other side, the departmental representative argued that the association was indeed liable to pay the service tax as per the agreement.

Upon considering the submissions from both sides and examining the agreement presented, the Tribunal noted that the rent cheques were issued in the names of individual owners, not the association. Citing a previous order where unconditional stay was granted in a similar case, the Tribunal found no reason to deviate from that decision. The Tribunal concluded that the appellants had made a strong prima facie case for the waiver of pre-deposit of the amounts involved. Consequently, the applications for the waiver of pre-deposit were allowed, and recovery of the amounts stayed until the disposal of the appeals.

This judgment highlights the importance of examining the specifics of agreements in determining service tax liability, particularly in cases involving renting of immovable property. The decision underscores the significance of prima facie evidence and consistency in judicial decisions when considering requests for waiver of pre-deposit in tax liability cases.