Appellate Tribunal upholds service tax demand on property rental by cooperative society.

The Appellate Tribunal CESTAT Mumbai upheld the Order-in-Original, rejecting the appellant's plea regarding service tax on renting immovable property. The appellant, a cooperative society, faced demands for service tax, interest, and penalties under the Finance Act, 1994. The Tribunal waived penalties under Sections 76, 77, and 78 due to the appellant settling the service tax liability with interest within the specified period under Section 80(2). However, the demand for service tax along with interest was maintained as the appellant failed to contest it before lower authorities.

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Issues:
- Appeal against Order-in-Appeal upholding Order-in-Original and rejecting appellant's appeal.
- Failure to obtain service tax registration and pay applicable service tax for renting immovable property.
- Proposals for demand, recovery of service tax, interest, and penalties under relevant sections of Finance Act, 1994.
- Appellant's plea for waiver of penalties and dropping of demand based on specific provisions of Finance Act, 2012.
- Invocation of Section 80(2) for immunity from penalties for failure to pay service tax.
- Discharge of service tax liability with interest within the specified period.
- Decision on penalties, demand, and interest by the Tribunal.

Analysis:
The appeal before the Appellate Tribunal CESTAT Mumbai challenged the Order-in-Appeal that upheld the Order-in-Original, which rejected the appellant's plea regarding service tax on renting immovable property. The appellant, a cooperative society, had received rent without obtaining service tax registration, leading to a demand for service tax, interest, and penalties under various sections of the Finance Act, 1994. The Commissioner (Appeals) had affirmed the original order, prompting the appellant to appeal further.

During the hearing, the appellant did not appear, allowing the Tribunal to proceed with the case. The Revenue representative reiterated the findings of the impugned order, emphasizing the service tax liability on renting services from 2007 to 2011. The appellant sought waiver of penalties under Section 76, 77, and 78, and requested dropping of a specific demand amount, citing a tax refund payment to a local body under a relevant notification.

The Tribunal considered the appellant's submissions and the provisions of the Finance Act, 2012, particularly Section 80(2), which granted immunity from penalties for failure to pay service tax if the tax and interest were paid in full within a specified period. As the appellant had settled the service tax liability with interest before the deadline, the Tribunal invoked Section 80(2) to waive the penalties under Sections 76, 77, and 78.

However, regarding the demand amount in question, the Tribunal noted the lack of evidence or contest from the appellant before the lower authorities, leading to the demand being upheld. Ultimately, the Tribunal granted the appeal in part, waiving the imposed penalties but maintaining the demand for service tax along with interest. This decision was based on the specific provisions of the Finance Act, 2012, and the timely settlement of the service tax liability by the appellant.

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