2023 (9) TMI 520 - AT - Service Tax

Classification of services - maintenance and repair service and health and fitness service or club and association services - construction of club houses in all the properties and to provide access to the club houses - HELD THAT - This Tribunal in M/S RAHEJA UNIVERSAL PVT LTD VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-I 2017 (7) TMI 247 - CESTAT MUMBAI has already held that RUPL is not liable to be levied with service tax under the category of management, maintenance and repair service in respect of the deposits that RUPL collects from the purchasers of the units in accordance with Maharashtra Ownership of Flats Act, 1963. Further, it was also held that RUPL has paid service tax under the category of club or association service and, therefore, the said service was not required to be classified under health and fitness service. There is no merit in the grounds raised by Revenue - further, RUPL has correctly classified services under club and association service and without interfering with the service tax paid by them in respect of the said activities, the impugned order set aside. Appeal allowed.

Summary

Issues:
The issues involved in the judgment are the classification of services provided by a construction company under service tax laws, specifically regarding maintenance and repair service, and health and fitness service.

Classification of Services - Maintenance and Repair Service:
The appellant, a construction company, was alleged to be providing maintenance and repair services based on the deposits collected from purchasers. The original authority held that there was no short payment of service tax for a certain period. However, for a different period, there was a finding of short payment of service tax, resulting in a demand. The Tribunal, in a previous order, had already ruled that the company was not liable to pay service tax under the category of management, maintenance, and repair service. The Tribunal reiterated this finding and dismissed the appeal filed by Revenue.

Classification of Services - Health and Fitness Service:
The company had also provided club facilities to purchasers, for which they paid service tax under the category of membership of club services. The Revenue contended that these services should have been classified under health and fitness services. However, the Tribunal found that the company had correctly classified the services under club and association service, as evidenced by the service tax paid. The Tribunal held that there was no merit in the Revenue's appeal and set aside the impugned order.

Conclusion:
The Tribunal dismissed the appeal filed by Revenue regarding the classification of services under maintenance and repair service and health and fitness service. The Tribunal upheld the company's classification under club and association service and set aside the original authority's decision.