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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 ..... ociety is formed by the owners of the flats, thereafter the title of land etc. is passed on to the Flat Owners Co-operative Housing Society. The appellants are recovering a one-time maintenance deposit from each of the customers to whom they have sold the flats. The said amount is kept in a separate bank account as fixed deposit. From the interest earned on the said deposit, the appellants are expected to pay for various 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 dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is transferred on the promoter/appellants. Section 12 of the said Act provides flat taker to pay proportionate share of municipal taxes, water and electricity, ground rent and other public charges at the proper time and place to the promoter. The learned CA further stated that as per Section 12A of the said Act, Manager cannot cut off, with-hold, curtail or reduce essential supply or service. Further section 13 provides 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following case laws in support of his contention that since they were doing the statutory duty no service tax is leviable on the same. (a) Nahar Industrial Enterprises v. CCE 2008(10)STR 13(Del-CESTAT) (b) CCE v. Ankit Consultancy Ltd. 2007(6) STR 101 (Del-CESTAT) (c) CCE v. CMC Ltd. 2007(7)STR 702 (Bang. CESTAT) (d) Electrical Inspectorate, Govt. of Karnataka v. CST 2008(9)STR 494 (CESTAT-Bang.) 3.2 The learned CA further 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 mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es:- (a) Towards maintenance and repairs of common areas and facilities; (b) Wages of watchmen, sweepers etc. (c) Insurance (d) Revenue assessment (e) All other taxes, levies, charges and cess. (f) Electricity and water charges and deposits in respect of common electrical and water pumps and other installations. (g) Expenses of and incidental to the management and maintenance of the said Housing societies. 6.1 From the various activities we find that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts or are to take over flats sums for the payment of outgoings ever thereafter, pay all outgoings (including ground rent, municipal or other local taxes, taxes on income, water charges, electricity charges, revenue assessment, interest on any mortgage or other encumbrances, if any), until he transfers the property to the persons taking over the flats, or to the organization of any such persons. Where any promoter fails to pay all or any of the outgoings collected by him from the persons who have taken over flats or are to take over flats, before transferring the 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders 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. They act only as trustee or as pure agent. When the co-operative society is formed even the deposit account is shifted to Flat Owner's Co-operative Society. We also note that this is a statutory obligation on the appellants in terms of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, sale, management and transfer) Act, 1963. 7. Under these circumstances, we hold that the appellants are not providing the maintenance or repair service to the buyers of the flats. In view of this position, the impugned order is set aside and the appeals are allowed. (Pronounced in Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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