2015 (1) TMI 953 - AT - Service Tax

CENVAT Credit - renting of immovable property service - credit availed on LED Score Board - Held that - Regarding demand under renting of immovable property service, it was submitted that the amount includes amounts received for various warehouse and godown and other hire charges, ground hire charges for matches and practice, service contract receipts, stadium maintenance recovery, etc. That being the position, the demand under this head without identifying the specific category of service under each amount received can be classified and how it amounts to rendering classifiable service has not been examined. Except extracting the statutory provision, no findings have been given on specific arguments put forth by the appellant. It was also submitted that the learned Commissioner failed to consider the appellant's submission that the activity of renting of rooms does not attract service tax and the rooms were mostly occupied by non-members and therefore, it could not be considered as a service provided to the members. As regards the CENVAT credit availed on LED Score Board, he submits that LED was not only utilized for displaying of scores during the cricket matches but the same was also used for other functions for displaying of programmes and other items. In such cases the appellants paid service tax under the category of Mandap Keeper Service' and therefore CENVAT credit was admissible. He submits that CENVAT credit has been denied on the ground that CENVAT credit has been used for club or association service. However, in our opinion, accepting the submission that the LED display board was used for other functions also, the situation would be that credit would be available in the books. Once CENVAT credit is available and taken, there is no strict rule that it has to be used for same output service for which it is an input service. Therefore rejection for CENVAT credit on this ground in our opinion cannot be sustained. Therefore prime facie CENVAT credit appears to be admissible. - Partial stay granted.

Summary

Issues:
1. Failure to pay service tax on sale of space or time for advertisement and renting of immovable property service.
2. Failure to pay service tax under the category of membership of club or association service.
3. Admissibility of CENVAT credit on LED Score Board.

Analysis:
1. The appellant was issued a show-cause notice for not paying service tax on sale of space or time for advertisement, renting of immovable property service, and membership of club or association service. The demand for service tax amounting to Rs. 2,34,75,149/- was confirmed, along with interest and penalties. The appellant argued that the agreements with certain entities were not for sale of space but for using the land for hoardings, which should be classified as renting of immovable property. The appellant also contested the demand under renting of immovable property service, stating that specific categories of services were not identified, and the nature of the services provided was not examined properly. Additionally, the appellant argued that renting of rooms to non-members should not attract service tax. The Tribunal directed the appellant to deposit Rs. 35,00,000/- as a pre-deposit for hearing the appeal, with a waiver on the balance dues and a stay against recovery during the appeal.

2. Regarding the CENVAT credit availed on the LED Score Board, the appellant argued that the LED was used for various functions beyond displaying scores during cricket matches, making it eligible for CENVAT credit under 'Mandap Keeper Service.' The Tribunal opined that if the LED display board was used for other functions as well, the CENVAT credit should be allowed, even if it was used for club or association service. The Tribunal found the rejection of CENVAT credit on this ground unsustainable, indicating that the credit appeared to be admissible.

3. In relation to club or association service, the appellant relied on a Misc. Order to argue against the tax charge. The Tribunal directed the appellant to make a pre-deposit of Rs. 35,00,000/- within eight weeks and report compliance by a specified date for the appeal to proceed. Compliance with this requirement would result in a waiver of the balance dues and a stay against recovery during the appeal process.