2015 (10) TMI 578 - AT - Service Tax

Tribunal rules in favor of appellant on service tax liability dispute

Hiranandani Constructions Pvt Ltd Versus Commissioner of Central Excise Thane-I

The Tribunal upheld the service tax liability under GTA service but disagreed with the Revenue's position on 'Management, Maintenance or Repair Service.' ... Management, Maintenance or Repair Service – appellant had collected an amount from the prospective buyers in respect of maintenance or repairs form residential units as also the commercial units - Held That:- No service tax liability arise on the appellant under the category ‘Management, Maintenance or Repair Service' for the amounts collected by them from the prospective flat owners – No penalty is imposed as such under GTA as well as ‘Management, Maintenance or Repair’ Service – Decision in the case of Kumar Beheray Rathi [2013 (12) TMI 269 - CESTAT MUMBAI] followed - Decided in favour of the assessee. Issues:1. Service tax liability on GTA service for the period January 2005 to September 2007.2. Service tax liability on 'Management, Maintenance or Repair Service' for the period June 2005 to September 2007.Analysis:1. The appeal challenged the Order-in-Original passed by the Commissioner of Central Excise regarding service tax liability. The issue involved the appellant's liability under GTA service and 'Management, Maintenance or Repair Service' categories. The adjudicating authority found the appellant liable for collecting maintenance charges from flat buyers. The authority confirmed demands, interest, and penalties based on this conclusion.2. The appellant's representative argued that the issue of service tax liability under 'Management, Maintenance or Repair Service' was settled in previous judgments. Referring to specific cases, the representative contended that amounts collected by the appellant were not taxable under maintenance or repair service. The Departmental Representative argued that tax liability existed for amounts collected from prospective buyers for maintenance or repairs of residential and commercial units.3. The Tribunal considered both sides' submissions. They upheld the service tax liability under GTA service due to the negligible amount involved. However, concerning 'Management, Maintenance or Repair Service,' the Tribunal disagreed with the Revenue's position. Citing previous judgments, they concluded that the appellant's activities did not constitute maintenance or repair services under the Finance Act.4. The Tribunal analyzed provisions of the Maharashtra Ownership Flats Act and Finance Act to support their decision. They noted that the appellant's role was that of a trustee or pure agent, not a provider of maintenance services. The statutory obligations under the Maharashtra Ownership Flats Act further supported the appellant's position.5. The Tribunal found no service tax liability on the appellant for amounts collected under 'Management, Maintenance or Repair Service.' They also waived penalties, considering the appellant's compliance with service tax liabilities. The appeal was disposed of accordingly, with no penalties imposed.This detailed analysis of the judgment highlights the key arguments, legal interpretations, and conclusions reached by the Tribunal regarding the service tax liabilities on GTA service and 'Management, Maintenance or Repair Service' in the case.