2015 (3) TMI 598 - AT - Service Tax

Renting of immovable property - renting of immovable property to various State Government offices previously held to be not taxable - Held that - AR, at this stage, has not been able to show us that the earlier order of Commissioner (Appeals) was appealed against by the Revenue or the same was accepted. As such, we deem it fit, at this stage itself, to set aside the impugned order itself and remand the matter to the original adjudicating authority for fresh decision after considering the definition of renting of immovable property' as also the observance made by the Commissioner(Appeals) in his above referred decision. The fact of the said order having attained finality or otherwise would also be examined by the lower authorities. The appellant's claim of applicability of the Finance Act, 2012 in respect of penalty would also be examined. - Decided in favour of assessee.

Summary

Issues:
1. Predeposit of balance amounts in service tax case for renting of immovable property.
2. Taxability of renting to State Government offices for service tax purposes.
3. Interpretation of the definition of 'renting of immovable property' in relation to business or commerce activities.

Analysis:
1. The appellant had paid a portion of the confirmed service tax amount and sought dispensation of predeposit for the balance. The Tribunal found the amount paid sufficient and allowed the stay petition without requiring further predeposit.

2. The appeal focused on the taxability of renting immovable property to State Government offices for service tax. The appellant argued that renting to offices like District Treasury and Electrical Inspectorate, which do not use the premises for business purposes, should not attract service tax. The Tribunal noted an earlier order-in-appeal highlighting that such renting may not fall under 'renting of immovable property' if not used for business purposes.

3. The appellant contended that renting to Government offices not involved in business activities should not be considered 'renting of immovable property' as per the definition. The Tribunal observed that the lower authorities did not consider the earlier order-in-appeal's observations and decided to set aside the impugned order, remanding the matter for fresh decision. The Tribunal directed the original adjudicating authority to consider the definition of 'renting of immovable property' and the Commissioner(Appeals) observations, while also examining the finality of the earlier order and the appellant's claim regarding the Finance Act, 2012's applicability to penalties.

In conclusion, the Tribunal disposed of the stay petition and appeal by setting aside the order and remanding the matter for reconsideration in light of the legal interpretations and observations mentioned above.