2014 (9) TMI 855 - AT - Service Tax

Waiver of pre-deposit - activity of sale of water - renting of immovable property - Goods Transport Agency - Held that - The supply of water by the petitioner resulting in receipt of consideration therefor was admittedly prior to 1-7-2010. It was therefore incumbent that Revenue should have clearly identified the appropriate taxable service into which supply of water falls. This exercise is absent either in the show cause notice or in the impugned adjudication order. We are therefore prima facie satisfied that the conclusion that supply of water is a taxable service, prior to 1-7-2010, is not sustainable. Renting of immovable property - Held that - The endeavour of the Revenue to classify the transaction as renting of immovable property is prima facie mis-conceived since no ingredients of transfer of immovable property as defined to fall within the ambit of renting of immovable property under Section 65(105)(zzzz) of the Act are seen from the nature of the activities summarized in para 19 of the show cause notice. The relevant portion of the impugned adjudication order is equally vague. We are therefore prima facie satisfied that no relevant criteria of renting of immovable property are discernible in the transaction pursuant to which ₹ 1,72,34,500/- was received as consideration by the petitioner from M/s. Asian Tanking Pvt. Ltd . GTA service - held that - . That the petitioner is liable to remit Service Tax as the recipient of goods transport agency service is not contested. - pre-deposit ordered in respect of GTA service only - partial stay granted.

Issues involved:
1. Waiver of pre-deposit and stay of further proceedings sought by the petitioner.
2. Classification of supply of water as a taxable service prior to 1-7-2010.
3. Confirmation of amount for renting of immovable property and its classification.
4. Tax liability arising from goods transport agency service received by the petitioner.

Analysis:
1. The petitioner sought waiver of pre-deposit and stay of proceedings following an adjudication order by C.C.E. & S.T., Hyderabad-II Commissionerate. The Revenue asserted a demand of &8377; 3,05,83,495, comprising amounts related to the sale of water, renting of immovable property, and goods transport agency service. The petitioner was required to supply water to vessels at the Kakinada Deep Water Port under an agreement with M/s. Kakinada Seaports Ltd. Revenue considered this as a taxable port service. The classification of port services was amended by the Finance Act, 2010, effective from 1-7-2010, impacting the taxation of services provided within the port.

2. The supply of water by the petitioner was deemed a taxable service by Revenue, but the classification exercise was missing in the show cause notice and the adjudication order. The Tribunal found that the identification of the appropriate taxable service for supply of water before 1-7-2010 was not clearly done, indicating a lack of sustainable conclusion.

3. An amount for renting of immovable property was confirmed in the adjudication order. The Revenue alleged that the petitioner received a sum for developing storage infrastructure at the port. However, the Tribunal found the classification as renting of immovable property to be prima facie mis-conceived, as the nature of activities did not align with the criteria for such classification under the Act.

4. The tax liability of &8377; 24,905 arising from goods transport agency service received by the petitioner was confirmed. The petitioner's defense that no Service Tax was recovered from the service provider was rejected. The Tribunal found no merit in this contention, upholding the liability of the petitioner to remit the Service Tax.

In conclusion, the Tribunal granted waiver of pre-deposit on certain conditions and stayed the recovery pending disposal of the appeal. The detailed analysis of each issue highlighted discrepancies in the classification of services and tax liabilities, leading to a nuanced evaluation of the petitioner's claims and the Revenue's assertions.

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