2023 (4) TMI 665 - AT - Service Tax

Levy of Service tax - management, maintenance and repair services - applicability of Board Circular No. B-2/8/2004-TRU dated 10.09.2004 and Board Circular No. 80/2004 dated 17.09.2004 - penalties under section 76 and 78 - extended period of limitation - HELD THAT - The two Board s circulars relied upon by the learned counsel explained the scope of various services and their taxability. The Circular dated 17.09.2004 discussed the scope of service tax on business exhibition services, airport services, transport of goods by air services, opinion poll services, construction services etc. but it did not say anything about the scope of service tax payable on management, maintenance and repair services . Similarly, the Circular dated 10.09.2004 also discusses various changes made in the Finance Bill (No. 2) 2004 to the service tax provisions but this Circular also does not discuss the scope of management, maintenance and repair services . Therefore, these two circulars do not come to the aid of the appellant. It is undisputed that the services were provided by the appellant to RHB and PHED. Before the Commissioner (Appeals), the appellant had contested the demand relying on the provisions of section 98 of the Act which exempted non-commercial Government buildings during the period on and from 16 day of June, 2005 till 28 May, 2012. Commissioner (Appeals), however, found that the appellant s services were not covered by this section as the appellant had not managed or maintained or repair any non-commercial Government buildings, but had maintained pipelines as admitted by the appellant itself - the learned Commissioner (Appeals), is fully agreed upon. There is no case for the appellant to claim an exemption from payment of service tax under management, maintenance and repair services either under section 98 of the Act or under the two CBEC Circulars, indicated above - Undisputedly, the appellant had not maintained any non-commercial buildings of the Government, but had maintained pipelines which were not exempted under any notification or provision or circular - thus, the impugned order was correct and proper in confirming the demand under the head of management, maintenance and repair services. Extended period of limitation - HELD THAT - It is evident from SCN that the appellant had not disclosed the value of these services which it had rendered to the department - there are no reason to hold that the demand was time barred as the appellant had suppressed the value of these services for the department. Penalties under section 76 and 78 - HELD THAT - They have already been reduced proportionately by the Commissioner (Appeals) in the impugned order. There are no reason to interfere with them. The impugned order is correct and calls for no interference - Appeal dismissed.

Summary

Issues:
The issues involved in the judgment are the demand of service tax under the categories of construction of complex services, technical testing and analysis services, and management, maintenance, and repair services. The appeal was filed to challenge the order-in-appeal passed by the Commissioner of Customs & Central Excise (Appeals), Jaipur.

Construction of Complex Services:
The Commissioner (Appeals) set aside the demand under the category of construction of complex services. This decision was not appealed by the Revenue, thus attaining finality.

Technical Testing and Analysis Services:
The appellant did not press the issue of demand under technical testing and analysis services due to the small amount involved, leaving the only issue before the tribunal as the demand of service tax under management, maintenance, and repair services.

Management, Maintenance, and Repair Services:
The appellant provided these services to government bodies and argued that they were exempt from service tax under certain provisions. However, the tribunal found that the services provided were not covered by the exemption as they involved maintenance of pipelines, not non-commercial government buildings. The tribunal upheld the demand under this category, stating that the appellant was not entitled to an exemption under Section 98 of the Act or relevant circulars.

Extended Period of Limitation:
The appellant contested the demand on the grounds of limitation, claiming that the extended period should not have been invoked. However, the tribunal found that the demand was not time-barred as the appellant had not disclosed the value of the services rendered. The extended period of limitation was deemed correctly invoked.

Penalties under Sections 76 and 78:
The penalties imposed under sections 76 and 78 were proportionately reduced by the Commissioner (Appeals), and the tribunal found no reason to interfere with them. The impugned order was upheld, and the appeal was dismissed.

The tribunal carefully considered the arguments presented by both sides and examined relevant records. Circulars cited by the appellant did not support their claim for exemption from service tax. The tribunal agreed with the Commissioner (Appeals) that the appellant's services did not qualify for the exemption under Section 98 of the Act. The demand under management, maintenance, and repair services was upheld due to the nature of services provided to government bodies. The tribunal also found that the extended period of limitation was correctly invoked, as the appellant had not disclosed the value of the services, justifying the demand and penalties imposed. Ultimately, the impugned order was deemed correct and no interference was warranted, leading to the dismissal of the appeal.