2014 (2) TMI 1045 - AT - Service Tax

Waiver of penalty in respect of delayed payment of service tax on renting of immovable property - Section 80 was amended and a new provision of section (2) was introduced, vide Finance Act, 2012 - Held that - The appellant in the present case has deposited the service tax alongwith interest on 03.12.2011 and 25.05.2012. As such the said provision is fully applicable to the facts of the present case. - Following the decision in M/s. Euro Ceramics Ltd. Versus Rajkot 2013 (5) TMI 538 - CESTAT AHMEDABAD , penalty waived - Decided in favor of assessee.

Summary

Issues:
1. Waiver of pre-deposit of penalty and appeal on penalty.
2. Taxability of renting of immovable property.
3. Retrospective amendment and disputes.
4. Amendment to Section 80 and penalty imposition.

Issue 1: Waiver of pre-deposit of penalty and appeal on penalty
The appellant had already deposited the confirmed demand of Rs.72,306 along with interest. The tribunal waived the pre-deposit condition of penalty as the appellant was not contesting the demand and interest but was only seeking to set aside the penalty. Thus, the tribunal proceeded to decide the appeal on penalty.

Issue 2: Taxability of renting of immovable property
The impugned order of the Commissioner (Appeals) referred to the introduction of service tax on renting of property service through a notification and subsequent amendments. It highlighted the retrospective effect of the Finance Bill, 2010, which validated the levy of service tax on renting of immovable property from 1.6.2007. The amendment in the definition of taxable service 'Renting of immovable property' was given retrospective effect, indicating the taxability of renting itself as a taxable service.

Issue 3: Retrospective amendment and disputes
The judgment mentioned disputes regarding the taxability of renting of immovable property before various courts, including a reference to a case before the Hon'ble High Court of Delhi. It noted the retrospective amendment introduced through the Finance Bill, 2010, which validated the levy of service tax on renting of immovable property with effect from 1.6.2007.

Issue 4: Amendment to Section 80 and penalty imposition
An amendment to Section 80 introduced a provision stating that no penalty shall be imposed for failure to pay service tax on the taxable service of renting of immovable property, subject to the condition that the tax along with interest is paid within a specified period. The tribunal observed that the appellant had paid the service tax and interest within the required timeframe, making the provision applicable. Citing a precedent where the penalty was set aside under similar circumstances, the tribunal confirmed the demand and interest while setting aside the penalty imposed on the appellant.

In conclusion, the judgment addressed the waiver of pre-deposit of penalty, the taxability of renting of immovable property, retrospective amendments, and the imposition of penalties under the relevant provisions. The tribunal's decision was based on the appellant's compliance with payment requirements and the applicability of statutory provisions in the given circumstances.