2013 (11) TMI 1068 - AT - Service Tax

Stay application - valuation - Construction of residential flats - inclusion of Payment of fees - Held that - Appellant was obliged to discharge property tax, water and electricity tariff etc. on behalf of the flat owners and the appellant has undertaken these activities in the capacity of an executor. Therefore, the appellant has not rendered any management, maintenance or repair services - In view of provisions of Section 5 of the Maharashtra Ownership Flats (Regulation) Act, 1963, prima facie case is in favour of assessee - Stay granted.

Summary

Issues:
1. Whether the appellant's activities fall under the category of "Management, Maintenance, and repair services" for service tax purposes.
2. Validity of the service tax demand including GTA service amount.

Analysis:
1. The case involved M/s. Omega Associates, Mumbai, engaged in constructing residential flats. The appellant collected development and maintenance fees from flat buyers before handing over possession, as per obligations under Section 5 of the Maharashtra Ownership Flat (Regulation) Act, 1963. The department contended that the activities undertaken by the appellant fell under "Management, Maintenance, and repair services," leading to a service tax demand of Rs.58,76,877, including GTA service charges of Rs.9,886.

2. The appellant's counsel argued that the appellant's role was that of an executor, obligated to discharge property tax, water, and electricity charges on behalf of flat owners. It was asserted that the appellant did not provide management, maintenance, or repair services, making the demand unsustainable. Reference was made to a Tribunal decision granting a stay in a similar case involving Lake View Developers. The counsel also highlighted that individual service providers had already paid service tax for specific services like cleaning and lift maintenance.

3. The Revenue's representative reiterated the findings of the adjudicating authority, supporting the service tax demand. However, after considering submissions from both parties and examining Section 5 of the Maharashtra Ownership Flats (Regulation) Act, 1963, the Tribunal found merit in the appellant's arguments. Consequently, the Tribunal granted an unconditional waiver from the pre-deposit of dues and stayed the recovery during the appeal's pendency.

This judgment showcases the Tribunal's detailed analysis of the appellant's activities in relation to the relevant legal provisions. The decision to grant a waiver from pre-deposit indicates a favorable view towards the appellant's position, emphasizing the importance of statutory interpretation and compliance in service tax matters.