2012 (7) TMI 915 - AT - Service Tax

Summary

Issues involved: Service tax demand on management, maintenance, and repair services of immovable property.

Summary:
The judgment by the Appellate Tribunal CESTAT MUMBAI addressed a service tax demand of Rs. 3,58,22,777/- u/s the Finance Act, 1994, confirmed against the applicants for management, maintenance, and repair services of immovable property from June 2005 to March 2010. The applicant argued that they modified their contracts post the introduction of the service tax levy in June 2005, paying tax on maintenance activities but not on the operation of the power plant. Citing precedents like Hyundai Heavy Industries Co. vs. CCE, Wartsila India Ltd. vs. CCE, and Operational Energy group India Pvt. Ltd. vs. CCE, the Tribunal agreed that the operation of a power plant does not fall under the category of management, maintenance, and repair services, granting a stay on the demand. The Revenue contended that the applicant's activities constituted management and maintenance of the power plant, advocating for a pre-deposit. After hearing both sides and examining the contract clauses, the Tribunal found that the applicant was only liable for service tax on maintenance activities, not on operational activities. Relying on the cited decisions, the Tribunal granted a stay on the requirement of pre-deposit and recovery during the appeal's pendency.