2015 (11) TMI 1046 - AT - Service Tax

Demand of service tax - Management, Maintenance or Repair services - appellant (builder) collected an amount from the flat owners which is titled as towards Management, Maintenance or Repair of the premises - Held that - As regards the Management, Maintenance or Repair services, we find that it is undisputed that the said amounts are collected by the appellant as a builder for the common maintenance of building as well as the entire premises of the apartment. We find that it is undisputed that the amounts which are collected are used for Management, Maintenance of the common facilities. Ld. CA was correct in bringing to our notice that the issue is now settled by this bench in Kumar Beheray Rathi (2013 (12) TMI 269 - CESTAT MUMBAI) - service tax liability as confirmed against the appellant under Management, Maintenance or Repair services is unsustainable. As regards the point raised by the ld. AR, that amount collected for maintenance of Garden, roads and club house facilities are for the members of the society as and when formed; secondly the entire premises is transferred to society of members, on execution of conveyance deed. The impugned order to that extent is set aside - Decided in favour of assessee.

Summary

Issues: Service tax liability on appellants under Goods Transport Agency and Management, Maintenance or Repair services.

Analysis:
1. The appeals were against two orders regarding service tax liability on the appellants under Goods Transport Agency and Management, Maintenance or Repair services.
2. Both cases were disposed of together since the issue was the same.
3. The main issue was the taxability of the amount collected by the appellants for Management, Maintenance, or Repair services.
4. The revenue argued that the collected amount falls under the category of Management, Maintenance, or Repair services and should be taxed.
5. The bench considered the arguments and noted that the appellants were not contesting the service tax liability under the Goods Transport Agency service seriously, so the liability was upheld.
6. The appellants had paid the demand before the issuance of the show-cause notice, and the bench directed the lower authorities to verify the calculations and accept the amount paid.
7. Regarding Management, Maintenance, or Repair services, the bench referred to previous judgments and held that the service tax liability confirmed against the appellants was unsustainable.
8. The bench found that the amounts collected were used for common maintenance purposes and statutory obligations under the Maharashtra Ownership Flats Act.
9. The penalties imposed on the appellants for Management, Maintenance, or Repair services were set aside, and the interest on this count was deemed unsustainable.
10. Both appeals were disposed of accordingly.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both sides, and the final decision reached by the bench, providing a comprehensive overview of the legal proceedings and outcomes.