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2018 (10) TMI 557 - AT - Service TaxRenting of immovable property service - default in payment of rent- Department has adjusted the advance received as security deposit by the appellant towards the demand raised for the period 2007-08 - case of appellant is that this is not warranted as this amounts to higher burden of interest - penalty - Held that:- The intention of the security deposit is to adjust the same when there is default in payment of rent. Such default has happened only from October, 2009 to March, 2010. In that case, the Department cannot demand service tax on the advance received by the appellant for the period 2007-08. This would make the appellant pay a higher amount of interest - appellant argues that they have discharged the service tax liability along with interest by calculating the adjustment of advance received by them to the rent dues for the period October, 2009 to March, 2010 - matter is remanded for requantification. Penalties - Held that:- The issue whether renting of immovable property is liable to service tax was under litigation - The matter is still pending before the Hon’ble Supreme Court - penalty imposed under Section 78(1) of the Act cannot sustain and requires to be set aside. Appeal allowed in part and part matter on remand.
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