2015 (12) TMI 76 - AT - Service Tax

Waiver of pre deposit - supply of tangible goods service - lease of a boiler owned by the petitioner - Held that - On a prima facie analysis, the transaction appears to be clearly outside the purview of STGU. We therefore grant waiver in full of pre-deposit and stay all further proceedings for realisation of the adjudicated liability, pending disposal of the appeal - Stay granted.

Summary

Issues:
Service Tax demand on the lease of a boiler under Section 65(105)(zzzzj) of the Finance Act, 1994.

Analysis:
The adjudication order confirmed a Service Tax demand on the petitioner for providing a taxable supply of tangible goods service through the lease of a boiler to a company. The lease agreement indicated the transfer of possession and effective control over the leased goods by the lessee, leading to the conclusion that the taxable service was provided by the petitioner. However, the statutory provision excludes such transfers from the scope of taxable service, raising a question on the applicability of Service Tax.

The petitioner's appeal to the Commissioner (Appeals) was rejected, indicating a continuation of the dispute regarding the Service Tax demand on the lease transaction. Despite the initial conclusion by the adjudicating authority, a prima facie analysis suggests that the transaction falls outside the purview of the taxable service, emphasizing the need for a detailed review of the legal provisions and lease agreement terms.

Considering the prima facie analysis and the exclusion of tangible goods involving transfer of possession and effective control from the taxable service, the tribunal granted a waiver of pre-deposit and stayed further proceedings for the realization of the adjudicated liability. This decision indicates a temporary halt in the enforcement of the Service Tax demand pending the appeal's final disposal, ensuring fairness and due process in the legal proceedings related to the lease transaction.