2013 (11) TMI 1355 - AT - Service Tax

Demand of service tax, interest and penalty - Renting of immovable property - Revenue contends that assessee was providing storage or warehousing service - Held that - there is some material to show that the petitioner may have provided loading and unloading of FCI goods . From the generic nature of the petitioner s corporate business also, it is conceivable that it could have provided warehousing facility, though the petitioner failed to produce any evidence to support its assertion that it was providing warehousing facility, before the adjudicating authority - Assessee directed to remits 50% of the adjudicated liability of service tax along with the proportionate interest on this amount - Partial stay granted.

Summary

Issues:
1. Waiver of pre-deposit and stay of further proceedings for the adjudicated liability of service tax.
2. Classification of services provided as 'renting of immovable property' or 'storage or warehousing' service.
3. Consideration of additional evidence to support the classification of services.

Issue 1: Waiver of pre-deposit and stay of further proceedings for the adjudicated liability of service tax.
The appellant sought relief from pre-deposit and stay of proceedings regarding the adjudicated liability of Rs.5,98,35,490/-, Rs.1,45,07,826/- towards service tax, interest, and penalties. The Tribunal granted a waiver of pre-deposit on the condition that 50% of the adjudicated liability of service tax along with interest be remitted within six weeks, failing which the stay would be dissolved.

Issue 2: Classification of services provided as 'renting of immovable property' or 'storage or warehousing' service.
The proceedings were initiated based on show cause notices alleging that the appellant provided 'renting of immovable property' service to the Food Corporation of India (FCI). The appellant contended that they were providing 'storage or warehousing' service, supported by various documents. However, the adjudicating authority concluded that the activity amounted to 'renting of immovable property' service as the appellant did not provide additional services such as unloading, stacking, inventory keeping, security arrangements, or insurance cover. The Tribunal found that the appellant failed to produce relevant agreements with FCI indicating additional services, leading to the classification of the activity as 'renting of immovable property' service.

Issue 3: Consideration of additional evidence to support the classification of services.
The appellant argued that they provided ancillary activities like loading, unloading, stacking, fumigation, security, and insurance, making the transactions more aligned with 'storage or warehousing' service. The Tribunal declined to consider new evidence at that stage but allowed the appellant to file an application for additional evidence. The Tribunal noted some material indicating loading and unloading activities by the appellant, suggesting the possibility of providing warehousing facilities, although no concrete evidence was presented before the adjudicating authority.

In conclusion, the Tribunal granted a partial waiver of pre-deposit and stay of proceedings, emphasizing the need for the appellant to remit a portion of the adjudicated liability within a specified timeframe. The classification of services provided as 'renting of immovable property' rather than 'storage or warehousing' was upheld based on the lack of evidence supporting additional services beyond renting space. The possibility of considering additional evidence in the future was left open for the appellant to establish the nature of services provided.