2015 (8) TMI 33 - 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 services provided by the contractor for parks and road side plantation.

Analysis:
The appeal was filed against an order confirming a service tax demand of Rs. 74,72,718 on the appellant for providing management, maintenance, or repair services without paying service tax. The appellant, a contractor, had contracts with Jaipur Development Authority and Jaipur Nagar Nigam for various services related to parks and roadside plantation maintenance. The adjudicating authority upheld the demand from 1.5.2006 onwards, citing the scope falling under management, maintenance, or repair services 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 of facts, and maintenance of parks was a statutory duty of the authorities. The Department argued that statutory duty did not exempt services from service tax, and the appellant's lack of cooperation justified invoking the extended period for demand.

The CESTAT analyzed the definitions of maintenance or repair services before and after 1.5.2006. It noted a change in the definition to include maintenance or repair of properties, whether immovable or not, from that date. The judgment in a previous case was discussed, where it was held that maintenance of grass, plants, and trees did not fall under maintenance of immovable property. However, the CESTAT concluded that even non-immovable properties were included in the scope of management, maintenance, or repair services from 1.5.2006, justifying the demand.

The appellant's failure to register for service tax, file returns, provide details, or cooperate in the investigation was deemed as suppression of facts. Despite this, the CESTAT directed a re-computation of the service tax liability considering the supply of goods involved in the services provided. The case was remanded for re-computation of the demand, considering the benefit of a specific notification regarding the supply of goods, and the appellant was granted an opportunity to establish eligibility for the notification's benefit. Penalties were to be re-computed accordingly, and the appeal was disposed of with these directions.