2014 (1) TMI 564 - AT - Service Tax

Waiver of pre-deposit of service tax - Renting of Immoveable Property Service - Industrial and commercial construction activity - Held that - Applicants constructed a mall and now registered with the Revenue authorities as provider of service of renting of immoveable property - credit of input service which are used in the construction of mall is available where the assessee is providing renting of immovable property service - prima facie applicant has made out a case for total waiver of dues Following decision of Navaratna S.G. Highway Prop Pvt. Ltd. vs. Commr of S.T., Ahmedabad 2012 (7) TMI 316 - CESTAT, AHMEDABAD - Stay granted.

Summary

Issues Involved:
Waiver of pre-deposit of service tax, availability of credit on input services, sustainability of demand.

Waiver of Pre-Deposit of Service Tax:
The applicant filed an application seeking waiver of pre-deposit of service tax amounting to Rs. 8,34,74,601/- along with interest and penalty. The applicant, registered as a provider of Renting of Immoveable Property Service, had availed credit for service tax paid on industrial and commercial construction activities. A portion of the demand was related to service tax paid on reverse charged mechanism services received from a foreign service provider. The applicant contended that they had constructed a mall in Pune and had received services from various providers for construction activities, for which appropriate tax had been paid. The Tribunal considered previous decisions where similar credits were disallowed but later waived on appeal. The Tribunal noted that the applicant had reversed credit for a portion of the constructed area sold and had made a case for total waiver of dues. Consequently, the pre-deposit amount was waived, and recovery stayed during the appeal process.

Availability of Credit on Input Services:
The Revenue argued that the input services were received concerning immovable property, and the applicant had availed credit for service tax paid in Mumbai. The applicant cited a Tribunal decision allowing credit for input services used in the construction of a mall when providing renting of immovable property service. The Tribunal observed that the decision relied upon by the applicant was not considered by the lower authority due to an appeal pending before the High Court. However, since there was no order from the High Court staying or setting aside the Tribunal's decision, the Tribunal found that the applicant had established a prima facie case for the waiver of dues. Therefore, the Tribunal granted the waiver of pre-deposit and stayed the recovery during the appeal process.

Sustainability of Demand:
The Tribunal examined the applicant's construction of a mall and registration as a provider of renting of immovable property service. It noted that a previous Tribunal decision had allowed credit for input services used in mall construction for a similar service. The Revenue pointed out that the matter was pending before the High Court. However, as there was no stay or setting aside of the Tribunal's decision by the High Court, the Tribunal found the applicant's case strong for the total waiver of dues. Consequently, the pre-deposit amount was waived, and recovery stayed during the appeal process, allowing the stay petition.

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