2015 (12) TMI 18 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - renting of immovable property service - Held that - There is no constitutional provision brought to our notice which provides immunity to the appellant from the service tax liability for rendering taxable service. It is also a fact that the levy of service tax on rental income under renting of immovable property service was set aside by the Delhi High Court in 2009 in the case of Home Solution Retail India Ltd (2009 (4) TMI 14 - DELHI HIGH COURT) though that judgement was reversed by Delhi High Court in its subsequent judgement in 2011 as stated earlier. It clearly shows that there were questions as well as ambiguity about the impugned service. The definition of taxable service was also amended with effect from 1.6.2010. - in the chart submitted on 2.6.2014 the figures under the head collection from Govt. units are lower than the figures submitted earlier. We also note that appellant had not been cooperating in providing the figures. The leviability of service tax on similar rental income when the immovable property was rented for business or commerce has been upheld in the case of Greater Noida Industrial Authority Vs. CCE Noida 2014 (9) TMI 306 - CESTAT NEW DELHI . We are informed by the appellant that the demand for normal period of one year for renting for use in business or commerce works out to ₹ 18 crores (approx.). - Partial stay granted.

Summary

Issues:
Service tax demand under renting of immovable property service for the period 2007-2008 to 2011-2012. Appellant's contentions regarding statutory body status, rent received from non-business/commerce organizations, confusion due to legal challenges, and lack of wilful mis-statement. Respondent's arguments on suppression of facts and discrepancies in figures. Constitutional validity, ambiguity, and cooperation in providing figures. Leviability of service tax on rental income for business or commerce purposes.

Analysis:
The judgment pertains to a stay application and appeal against a service tax demand of &8377;103,69,88,179 for renting of immovable property service from 2007-2008 to 2011-2012. The appellant, claiming to be a statutory body, argued against the tax liability, citing rent from non-business/commerce entities and legal confusion due to past court decisions and retrospective amendments. The respondent contended suppression of facts and discrepancies in figures provided. The tribunal noted the absence of constitutional immunity for the appellant and the history of legal challenges and amendments regarding the taxable service. Discrepancies in figures submitted by the appellant were acknowledged, with a specific mention of lower figures for government unit collections in a later submission. The tribunal referenced a previous case upholding service tax on rental income for business or commerce purposes.

The tribunal found no constitutional provision granting immunity to the appellant from the service tax liability. It recognized the past legal ambiguity surrounding the taxable service due to conflicting court decisions and amendments. Despite discrepancies in figures provided by the appellant and lack of cooperation in submitting accurate data, the tribunal acknowledged a case for waiver of pre-deposit for the demand beyond the normal one-year period. Consequently, it ordered a pre-deposit of &8377;18 crores with interest within four weeks and stayed recovery of the remaining liability pending appeal, subject to compliance by a specified date. Default in compliance would result in dismissal of the appeal for failure to pre-deposit.