2017 (5) TMI 890 - AT - Service Tax

Renting of Immovable of Property Service - abatement of property tax - Held that - the property tax has been discharged on the property from where the appellant is conducting its business, the deduction on account of property tax amount paid are available and finding of lower authorities rejecting the same are unsustainable. Penalty u/s 76 of FA - Held that - since the issue was in dispute and retrospective amendments was made and one of the issue is still pending before the apex Court, the appellant has made out a justifiable cause for setting aside the penalty as per Section 80 of the FA, 1994 as applicable during the relevant period - penalties set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Service tax liability on amount received for services rendered falling under 'Renting of Immovable Property Service' for the period April 2009 to September 2009, penalty imposed under Section 76 of the Finance Act, 1994, deduction claimed on property tax, and applicability of Section 80 of the Finance Act, 1994.

Analysis:

1. Service Tax Liability Issue:
The appeal challenged the Order-in-Appeal regarding the service tax liability on the amount received for services rendered, questioning its categorization under 'Renting of Immovable Property Service' for a specific period. The appellant had already paid a significant portion of the confirmed demand, citing availed abatement of property tax and interest discharge. The Counsel highlighted a calculation error leading to an additional deposit post the impugned order. The Departmental Representative argued against the appellant's case, emphasizing the necessity of depositing the entire tax liability and disputing the claimed deduction on property tax due to ownership details. The Tribunal, after considering submissions, acknowledged the property tax payment for the appellant's office location, signed by the appellant's Director, and deemed the deduction valid. Consequently, the Tribunal accepted the appeal based on the available property tax payment evidence.

2. Penalty Imposed under Section 76:
Regarding the penalty imposed under Section 76 of the Finance Act, the Tribunal noted the ongoing dispute over the service tax liability classification and retrospective amendments, with a pending issue before the apex Court. Considering these circumstances, the Tribunal found a justifiable cause to set aside the penalty under Section 80 of the Finance Act, 1994 applicable during the relevant period. By invoking Section 80, the Tribunal decided to overturn the penalty imposed by the lower authorities, thereby providing relief to the appellant based on the prevailing legal provisions.

In conclusion, the Tribunal disposed of the appeal by accepting the appellant's arguments on the property tax deduction and invoking Section 80 to overturn the penalty imposed under Section 76. This judgment showcases a detailed analysis of the service tax liability issue, property tax deduction validation, and penalty imposition under the Finance Act, emphasizing legal provisions and factual considerations to deliver a fair decision.