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TMI Blog2013 (12) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... count in any bank of the deposits taken and use the same amount towards the outgoings. Further section 6 puts responsibility for payment of outgoings on the appellants till the property is transferred. Appellants are not in the business of maintenance or repair service or management of immovable property. The appellants cannot be held as provider of maintenance or repair service as they are only paying on behalf of various buyers of flats to various authorities (Municipal Corporation, Revenue authorities etc.) and various service providers (such as security agency, cleaning service providers etc.) and they are not charging anything on their own. The payments are made cost on cost basis and the same is debited from the deposit account. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous charges such as common electricity bill, water charges, security charges etc. After the flat owners co-operative housing society is formed, whatever balance is left in the said bank account the same is handed over to the Flat Owners Co-operative Housing Society. In the impugned order Service Tax has been demanded on the deposits made by various purchasers of the flats on the ground that the appellants are providing Maintenance and Repair service falling under Section 65(64) and Section 65(105)(zzg) of the Finance Act, 1994. 3. The learned CA's who appeared on behalf of the four appellants, main contention was that the appellants are only working as an agent/trustee of the funds of the flat owners. They themselves are not providing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides for punishment to promoters which can be even imprisonment for a term of upto 3 years or fine for contravention of Sections 3, 4, 5, 10 and 11 of the said Act. The learned CA further argued that from the said Act it is clear that the appellants are not taking any activity relating to maintenance, management or repair of the immovable property but are only paying the outgoings in accordance with the said Act till the flat owners co-operative housing society is formed. The learned CA also stated that they are paying municipal taxes, levies water charges, electricity charges and deposits in respect of common electrical and water pumps and other installations. He also argued that in respect of the security services such as watchmen etc. s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her argued that even if for the sake of argument it is assumed that the service tax is payable even then service tax cannot be demanded based upon the deposited amount (even prior to 16.6.2005) and interest thereon but on the gross outgoings relating to maintenance and repairs alone. 4. The AR reiterated various findings of the Commissioner in the impugned order. The learned AR stated that outgoings are two types, one relating to various utilities maintenance and the second one are relating to taxes, electricity and water charges. He further stated that the definition of maintenance or repair service at the relevant time meant any service provided by any person under a contract or an agreement for maintenance or management of immovable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the appellants are required to make payment relating to Revenue assessment, insurance, all other taxes, levies, electricity and water charges and deposits in respect of common electrical and water pumps and other installations. In addition they are paying for the maintenance and repair of common areas and facilities, wages or watchmen, sweepers etc. and some expenses relating to maintenance of the housing blocks. 6.2 We have also gone through the relevant provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of construction, sale, management and transfer) Act, 1963. We find that the Section 5 and 6 provides as under:- SECTION 05: PROMOTER TO MAINTAIN SEPARATE ACCOUNT OF SUMS TAKEN AS ADVANCE OR DEPOSIT AND TO BE T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property to the persons taking over the flats or to the organization of any such persons, the promoter shall continue to be liable, even after the transfer of the property, to pay such outgoings and penal charges (if any) to the authority or person to whom they are payable and to be responsible for any legal proceedings which may be taken therefor by such authority or person. From the above sections, it is clear that under the Act the appellants are obliged to maintain a separate account in any bank of the deposits taken and use the same amount towards the outgoings. Further section 6 puts responsibility for payment of outgoings on the appellants till the property is transferred. 6.3 We also note that at the relevant time the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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