2015 (7) TMI 588 - AT - Service Tax

Management maintenance or repair service - benefit of Notification No. 12/2003-ST - Held that - In the case of A.N.S. Construction (2009 (6) TMI 465 - CESTAT, NEW DELHI), the CESTAT held that respondents were engaged for activities of growing grass, plants, trees or fruits, vegetable, regular mowing of laws, pruning and trimming of shrubs end cleaning of garden, would not come within the ambit of maintenance of immovable property . While we find it hard to discern any ratio in the said judgement, the adjudicating authority has dropped the demand pertaining to the period up to 30.4.2006 on the ground that during that period maintenance or repair of only immovable property was liable to service tax. The Commissioner Appeals clearly noted that with effect from 1.5.2006 the change in definition of management, maintenance or repair brought maintenance or repair of properties whether immovable or not within the scope of management, maintenance or repair service and accordingly confirmed the impugned demand for the period with effect from 1.5.2006. It is seen that the appellant did not take Service Tax registration and did not file ST-3 returns pertaining to the impugned service. It also did not submit the details in spite of being asked and did not even respond to summons. The required details had to be gathered from JNN/JDA. Thus, the appellant is clearly guilty of suppression of facts. - Impugned service is liable to service tax under management, maintenance or repair service and the appellant is guilty of suppression of facts. - case remanded to the Commissioner (Appeals) with the direction that the impugned service tax liability may be recomputed after extending the benefit of Notification No. 12/2003-ST in respect of supply of goods (like trees/shrubs/climbers etc.) provided the conditions of the said Notification No. 12/2003-ST are satisfied - Decided partly in favour of assessee.

Summary

Issues:
Service tax demand on management, maintenance, or repair service

Analysis:
The appeal was filed against an order confirming a service tax demand on the appellant for providing management, maintenance, or repair services without paying the service tax. The appellant, a contractor, had contracts with authorities for the maintenance of parks and road side plantation, involving various activities like supply of plants, lawn care, security, and more. The adjudicating authority upheld the demand from May 1, 2006, based on the scope falling under management, maintenance, or repair service as per the Finance Act, 1994.

The appellant contended that the services provided did not fall under maintenance and repair of immovable property, there was no suppression or willful misstatement, and maintenance of parks was a statutory duty of the authorities, hence not liable to service tax. The Department argued that statutory duty did not exempt services from service tax, and the appellant's lack of cooperation during investigation justified invoking the extended period for tax liability.

The definition of maintenance or repair under Section 65(64) until April 30, 2006, excluded non-immovable property. However, from May 1, 2006, the scope expanded to include maintenance or repair of properties, whether immovable or not. The Tribunal noted a previous case where maintenance of grass, plants, and trees was not considered maintenance of immovable property, but clarified that post-May 1, 2006, even non-immovable property maintenance was taxable under management, maintenance, or repair service.

The appellant's failure to register for service tax, file returns, provide details, or cooperate in the investigation indicated suppression of facts. Despite this, the Tribunal acknowledged the supply of goods along with services and directed a reevaluation of the tax liability considering the supply of goods like trees/shrubs under Notification No. 12/2003-ST. The case was remanded for recomputation of tax liability and penalties after considering the benefit of the notification, granting the appellant an opportunity to establish eligibility.

In conclusion, the impugned service was held liable to service tax under management, maintenance, or repair service, with the appellant found guilty of suppressing facts. The case was remanded for reevaluation of tax liability considering the supply of goods and application of Notification No. 12/2003-ST, with penalties to be recomputed accordingly.