2015 (8) TMI 208 - AT - Service Tax

Tribunal rules in favor of appellant in pre-2010 land lease service tax dispute

M/s Bhilai Steel Plant Versus CCE, Raipur

The Tribunal ruled in favor of the appellant in a service tax dispute concerning the lease of vacant land prior to 1.7.2010. The Tribunal found that ... Waiver of pre deposit - Renting of Immovable Property Service - suppression of facts - Held that:- In the case of M/s Greater Noida Industrial Development Authority (2014 (9) TMI 306 - CESTAT NEW DELHI) the Tribunal referring to the judgement in the case New Okhla Industrial Development Authority (2014 (1) TMI 1203 - CESTAT NEW DELHI) held that renting of vacant land by way of lease or licence for construction of a building or a temporary structure for use at a later stage in furtherance of business or commerce would be taxable service only with effect from 1.7.2010 and not during the period prior to 1.7.2010. In view of the said judgement, we are of the view that the appellant has a prima facie case in its favour. Therefore, we waive the requirement of pre-deposit and stay recovery of the impugned adjudicated liabilities during pendency of the appeal. - Stay granted. Issues:Service tax demand on lease of vacant land - Liability of service tax prior to 1.7.2010 - Applicability of sub-clause (v) to Explanation 1 in Section 65(105)(zzzz) of Finance Act, 1994 - Prima facie case for waiver of pre-deposit.Analysis:The appeal was filed against an order confirming a service tax demand for the period 2007-2008 to 2011-2012, relating to a long-term lease deed executed by the appellant in favor of a company. The demand was based on the consideration received for the lease, including one-time non-refundable land premium, annual ground rent, and annual service charge. The appellant contended that service tax was paid from 1.7.2010 onwards, as sub-clause (v) to Explanation 1 in Section 65(105)(zzzz) was added only from that date. Citing relevant judgments, the appellant argued that prior to 1.7.2010, the lease of vacant land was not liable to service tax. The Revenue disputed whether the land leased was vacant, but the appellant maintained it was.Upon considering the arguments, the Tribunal referred to precedents and held that renting vacant land for construction purposes became a taxable service only from 1.7.2010 onwards. Relying on the judgment in the case of M/s Greater Noida Industrial Development Authority, the Tribunal found that the appellant had a prima facie case in its favor regarding the liability of service tax for the period before 1.7.2010. Consequently, the Tribunal waived the requirement of pre-deposit and stayed the recovery of the adjudicated liabilities during the appeal's pendency. The decision was made in favor of the appellant based on the interpretation of the relevant legal provisions and precedents, allowing relief from immediate payment of the disputed service tax amount.