2014 (1) TMI 42 - AT - Service Tax

Waiver of pre-deposit of service tax - Renting of immovable property - Held that - explanation to renting of immovable property service is added w.e.f. 1.7.2010 which provides that even the vacant land given or lease and licence for construction of building or temporary structure for use of commerce or business is covered under the scope of renting of immovable property service. Admittedly, the facts of the case that applicants are given only vacant land on lease prior to 1.7.2010. In view of this, prima facie we find that the applicant has a strong case in their favour. Therefore the pre-deposit of the remaining amount of service tax, interest and penalty is waived and recovery is stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
1. Waiver of pre-deposit of service tax amount.
2. Interpretation of the scope of service tax on renting of immovable property.
3. Applicability of service tax on vacant land lease before and after 1.7.2010.

Analysis:
The appellant filed an application seeking waiver of pre-deposit of service tax amount, interest, and penalty totaling Rs. 11,89,402. The demand was confirmed based on providing renting of immovable property falling under the definition of service tax as per Section 65 of the Act.

The appellant contended that they had leased land to M/s. Ganesh Benzoplast Ltd. in 1993, with a renewal in 2004. They argued that prior to 1.7.2010, renting of vacant land was not within the scope of service tax, and they began paying appropriate service tax from 1.7.2010 onwards. On the other hand, the Revenue claimed that the land lease occurred in 1993 and subsequent construction by M/s. Ganesh Benzoplast Ltd., supporting the lower authority's findings.

The Tribunal noted that the explanation to renting of immovable property service was added from 1.7.2010, encompassing even vacant land given on lease or license for construction for business purposes. As the applicants had only provided vacant land on lease before 1.7.2010, the Tribunal found a strong case in favor of the appellant. Consequently, the pre-deposit of the remaining service tax, interest, and penalty was waived, and recovery stayed during the appeal's pendency, thereby allowing the stay petition.

In conclusion, the Tribunal ruled in favor of the appellant, acknowledging the distinction in the scope of service tax on renting of immovable property before and after 1.7.2010, ultimately granting the waiver and stay of recovery pending the appeal.