2017 (1) TMI 975 - AT - Service Tax

Levy of tax - Management, Maintenance and Repair Services for 2006-2009 and 2009-10 - Site formation service for the period 2008-09 and 2009-10 - imposition of penalties - Held that - appellant had discharged the service tax liability in respect of construction of residential complex service and supply of tangible goods and also paid interest thereof. We find that the appellant could have misunderstood the provisions of the tax liability under those two heads and hence invoking the provisions of Section 80 of Finance Act, 1994, we set aside the penalties imposed on the appellant on these two services. As regards the service tax liability on Management, Maintenance and Repair Services, we find that the said maintenance and service were undertaken by the appellant in respect of the roads and as well as the construction of roads - Section 97 of Finance Act, 1994 categorically mandates for non-levy of service tax in respect of Management, Maintenance and Repair of roads during the period from days 16.06.2005 to 26.07.2009 (both days inclusive) - demand of tax and interest set aside. As regards Site formation service carried out for the railways authorities, the adjudicating authority has only held that the exemption under notification 17/05 is not applicable on the ground that they had not provided any document in support of the contention that the excavation has been related to the activity of railways - The documents which are produced before us and the claim the appellant before the lower authorities in reply to the show-cause notice, specifically states that they undertaken these services in respect of the construction of the road for the railways is proved - demand set aside. Penalties on all services set aside - service tax liability with interest on the Construction of Residential and Supply of Tangible goods for use upheld, as same are not contested - appeal disposed off - decided partly in favor of assessee.

Issues involved:
1. Service tax liability on construction of residential complex
2. Service tax liability on management, maintenance, and repair services
3. Service tax liability on site formation service
4. Service tax liability on supply of tangible goods service

Analysis:

Construction of Residential Complex:
The appellant had already discharged the service tax liability for this service and paid interest. The penalties imposed by the adjudicating authority were set aside based on the appellant's misunderstanding of the tax liability under this head. The penalties were waived invoking Section 80 of the Finance Act, 1994.

Management, Maintenance, and Repair Services:
The appellant argued that Section 97 of the Finance Act, 1994 exempted the service tax liability for the period from 16.06.2005 to 26.07.2009 for management, maintenance, and repair of roads. The adjudicating authority did not dispute that the services were related to roads. The tribunal found the impugned order upholding the tax liability with interest to be unsustainable and set it aside.

Site Formation Service:
The appellant provided site formation services to railways, which were claimed to be exempt under notification 17/2005-ST. The tribunal noted that the appellant had undertaken these services in relation to the construction of roads for the railways, as supported by documents produced. The confirmation of the demand under this head was deemed unsustainable, and the service tax liability was set aside.

Supply of Tangible Goods Service:
Similar to the construction of residential complex, the appellant had already discharged the service tax liability and paid interest for the supply of tangible goods service. The penalties imposed on the appellant for this service were also set aside.

In conclusion, the tribunal set aside the service tax demands for management, maintenance, and repair services, as well as site formation service, while upholding the service tax liability with interest for the construction of residential complex and supply of tangible goods. The penalties imposed on the appellant for all services were waived. The appeal was disposed of accordingly.

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