Tribunal grants waiver of pre-deposit for service tax on leasing vacant land pre-2010

The Tribunal ruled in favor of the appellant, granting waiver of pre-deposit of service tax amount, interest, and penalty. It was found that prior to 1.7.2010, renting of vacant land was not subject to service tax, and as the appellant had only provided vacant land on lease before this date, the demand for service tax was not applicable. The Tribunal acknowledged the change in the scope of service tax on renting of immovable property before and after 1.7.2010, allowing the waiver and stay of recovery pending the appeal.

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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.

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