2014 (11) TMI 83 - AT - Service Tax

Waiver of pre deposit - Renting of immovable property service - Held that - As regards renting of immovable property service there is no prima facie case for the appellant in view of the fact that Hon ble Supreme Court has directed the Members of the Indian Retailers Association to deposit 50% of the tax and provide Solvency Certificate for the balance which would show that there is no prima facie case in favour of the parties who were challenging the same 2011 (10) TMI 12 - Supreme Court of India . Under these circumstances we consider that appellant also may be required to deposit at least 50% of the tax with interest and for the balance 50%, should give Solvency Certificate to the Commissioner. what is important and relevant to consider about the liability of service tax is the understanding between the service provider and the receiver and the liability of the service to the tax. In this case, admittedly, the agreement for renting of immovable property is between the service receiver and the appellant and the Methodist Church is nowhere in the picture. From the records what emerges is that the appellant is a service provider and M/s. Pantaloon Retail (India) Ltd. is the service receiver. Therefore at this stage we are not in a position to consider this submission - appellant is directed to deposit 50% of the tax with proportionate interest - Partial stay granted.

Summary

Issues involved:
Jurisdiction of the Commissioner to adjudicate the matter, applicability of a previous decision, requirement of pre-deposit of tax amount for renting of immovable property service.

Analysis:
The judgment revolves around the issues concerning the jurisdiction of the Commissioner to adjudicate the matter related to the demand of service tax for renting of immovable property service. The first objection raised was regarding the jurisdiction of the Commissioner to adjudicate the matter at all, contending that the order is non-est. However, it was clarified that the Commissioner had the authority to pass the order based on the power conferred by a specific notification. The notification empowered the Chief Commissioner to exercise the power under the relevant provisions of the Finance Act, 1994. Therefore, it was established that the Commissioner had not passed the order without jurisdiction.

Regarding the applicability of a previous decision cited by the counsel, it was found that the decision in the case referred to could not be applied to the present case as there was no similar order issued by the Chief Commissioner in that particular case. Consequently, the preliminary objection raised based on the previous decision was rejected.

In terms of the renting of immovable property service, the judgment emphasized the need for a prima facie case for the appellant. The court highlighted a directive from the Honorable Supreme Court regarding the deposit of tax and provision of a Solvency Certificate, indicating that there was no prima facie case in favor of the challenging parties. The appellant was directed to deposit 50% of the tax amount with interest and provide a Solvency Certificate for the remaining balance. The court considered the understanding between the service provider and the receiver as crucial in determining the liability of service tax. It was noted that the agreement for renting of immovable property was between the appellant and the service receiver, not involving the Methodist Church. Therefore, the submission regarding the passing of rent to the church was not considered at that stage.

In conclusion, the judgment directed the appellant to comply with the deposit requirements within a specified timeline. The pre-deposit of the balance dues was waived subject to compliance, and a stay against recovery was granted during the pendency of the appeal.