Small-scale service tax exemption in co-owner renting arrangement justified waiver of pre-deposit and stay of recovery.

Service tax exemption under the small-scale threshold was examined in a renting arrangement where co-owners received rent separately for a theatre complex. The claim for exemption was advanced individually by each appellant, and the Tribunal treated the issue as prima facie covered by an earlier ruling on a similar structure. It noted that, for the exemption notification, the aggregate value had to be considered, but if the assessees were regarded individually as service providers, the threshold was not crossed. On that basis, waiver of pre-deposit and stay of recovery of service tax, interest and penalty were granted pending disposal of the appeals.

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Issues: Whether the appellants were entitled to waiver of pre-deposit and stay of recovery of service tax, interest and penalty in view of the small scale exemption threshold under the relevant notification.

Analysis: The demand arose from rent received separately by the co-owners under an agreement for renting the theatre complex. The claim for exemption was made individually by each appellant. The Tribunal noted that the dispute was covered prima facie by the earlier decision granting unconditional stay on a similar arrangement, where the aggregate value was to be considered for the purpose of the exemption notification and, if the assessees were treated individually as service providers, the threshold was not crossed.

Conclusion: The appellants were held entitled to waiver of pre-deposit and stay of recovery pending disposal of the appeals.

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