Appeal Granted: Service Tax Demand Set Aside with Penalty Relief

The Tribunal allowed the appeal, setting aside the service tax demand for the period prior to 01.07.2010 and the penalties for the period post 01.07.2010, providing consequential relief to the appellant.

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Issues Involved:
1. Service tax liability on the lease of vacant land prior to 01.07.2010.
2. Penalty imposition under Section 76, 77, and 78 for the period post 01.07.2010.

Issue-wise Detailed Analysis:

1. Service Tax Liability on Lease of Vacant Land Prior to 01.07.2010:
The appellant, M/s Bhilai Steel Plant, leased 34.59 acres of land to M/s Bhilai JVC Cement Limited (BJCL) for setting up cement plants. The dispute centers on whether this lease was subject to service tax under the "Renting of Immovable Property Service" category for the period before 01.07.2010. The appellant argued that the lease of vacant land was not taxable as per the definition in Section 65 (105) (zzzz) of the Finance Act, 1994, before its amendment on 01.07.2010. The Tribunal referred to the decisions in New Okhla Industrial Development Authority vs. CCE & ST, Noida and Greater Noida Industrial Development Authority vs. CCE & ST, Noida, which held that renting of vacant land was outside the purview of taxable service prior to 01.07.2010. The Tribunal found the Commissioner's finding that the leased land had buildings on it to be factually incorrect. The lease agreements indicated that only vacant land was leased, and any buildings were separately licensed for office use, with service tax already paid on those buildings. Consequently, the Tribunal concluded that no service tax was payable on the lease of vacant land prior to 01.07.2010, and the demand for this period was set aside.

2. Penalty Imposition Under Section 76, 77, and 78 for the Period Post 01.07.2010:
For the period after 01.07.2010, the appellant did not dispute the service tax liability and had already paid the due amount. However, the appellant contested the penalties imposed under Section 76, 77, and 78 of the Finance Act, 1994. The appellant argued that the conditions for imposing penalties, such as fraud or willful misstatement, were not met. Additionally, under Section 80(2) of the Finance Act, 1994, no penalty could be imposed if the service tax was paid within six months from the date of presidential assent to the Finance Bill, 2012. The Tribunal found that the appellant had paid the service tax within the stipulated period and, therefore, no penalties could be imposed. Consequently, all penalties for the period post 01.07.2010 were set aside.

Conclusion:
The Tribunal allowed the appeal, setting aside the service tax demand for the period prior to 01.07.2010 and the penalties for the period post 01.07.2010, providing consequential relief to the appellant.

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