2015 (8) TMI 32 - AT - Service Tax

Management maintenance or repair service - Extended period of limitation - management and maintenance of parks and road side plantation and maintenance - Held that - 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. - Demand of service tax confirmed. However, we have perused the typical work orders which apart from requiring maintenance or repair, involve supply of goods too, like supply of different trees, for which specific rates have been mentioned. On this being pointed out, Revenue conceded that service tax would not be chargeable on supply/sale of such goods and that the benefit of Notification No. 12/2003-ST would be available to the appellant if the conditions thereof were satisfied. 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. - Impugned service is liable to service tax under management, maintenance or repair service and the appellant is guilty of suppression of facts. - Matter remanded back - Decided partly in favour of assessee.

Summary

Issues:
Service tax demand on management, maintenance, or repair service provided by the appellant.

Analysis:
The appeal was filed against the order confirming a service tax demand on the appellant for providing management, maintenance, or repair service without paying service tax. The appellant, a contractor, had contracts with authorities for the maintenance of parks and road side plantation, involving various activities like supplying plants, fertilizers, lawn care, security, etc. The adjudicating authority upheld the demand from 1.5.2006 onwards under the scope of management, maintenance, or repair service.

The appellant contended that their services did not fall under maintenance and repair of immovable property, there was no suppression of facts, and maintenance of parks being a statutory duty should not attract service tax. The Department argued that statutory duty does not exempt services from service tax, and the appellant's lack of cooperation justified invoking the extended period for demand.

The definition of maintenance or repair changed from 16.6.2005 to 30.4.2006 to management, maintenance, or repair from 1.5.2006 onwards. The CESTAT judgment in a similar case was cited, where the demand up to 30.4.2006 was dropped due to the earlier definition. However, the demand from 1.5.2006 was upheld as the new definition included maintenance or repair of properties, whether immovable or not.

The appellant's failure to register for service tax, file returns, cooperate during investigation, and provide necessary details indicated suppression of facts. The judgment highlighted that even if certain activities like maintenance of trees and grass were not traditionally considered maintenance of immovable property, they fell under the revised definition from 1.5.2006.

The Tribunal remanded the case to reconsider the service tax liability after considering the supply of goods involved in the work orders. It was acknowledged that service tax would not apply to the sale of goods, and the appellant might benefit from a specific notification if conditions were met. The case was directed back to the Commissioner for recomputation of the demand, granting the appellant an opportunity to establish eligibility for the notification's benefit.

In conclusion, the impugned service was found liable to service tax under management, maintenance, or repair service, and the appellant was held accountable for suppressing facts. The case was remanded for reconsideration of service tax liability concerning the supply of goods and subsequent penalties.