2018 (7) TMI 1716 - AT - Service Tax

Tribunal partially upholds appeal on service tax for renting property, grants immunity from penalties

M/s Lalganga Builders Pvt. Ltd. Versus C.C.E. & ST, Raipur

M/s Lalganga Builders Pvt. Ltd. Versus C.C.E. & ST, Raipur - TMI Issues:1. Liability of the appellant for 'Renting of Immovable Property Services'.2. Applicability of service tax retrospectively from 01.06.2007.3. Imposition of interest and penalty on the appellant.4. Plea of the appellant regarding lack of awareness of tax liability.5. Benefit/immunity under Section 80 of the Act.Analysis:1. The appellant, engaged in commercial and industrial construction services, rented out immovable property for commercial use, falling under 'Renting of Immovable Property Services'. A Show Cause Notice was issued for non-payment of service tax on the rent received. The appellant admitted liability but claimed lack of awareness due to the retrospective imposition of tax from 01.06.2007.2. The tribunal noted that the appellant accepted liability and paid the due amount upon notification, showing no deliberate violation. However, interest under Section 75 was deemed applicable due to delayed payment. The appellant was held responsible for paying the interest as directed by the Adjudicating Authority.3. Regarding the penalty, the tribunal referred to a Supreme Court decision staying service tax collection on rental services till 31.09.2011 but clarifying no stay on future tax liability from 01.10.2011. The period in question fell under this decision, leading to the waiver of penalties under Section 80 of the Act by the Adjudicating Authority.4. Consequently, the tribunal partly allowed the appeal, directing the Commissioner Adjudication to reassess the demand based on the observations made. The judgment upheld the liability of the appellant for the service tax on renting immovable property, the applicability of tax retrospectively, and the imposition of interest while granting immunity from penalties under Section 80 of the Act.