2018 (3) TMI 860 - AT - Service Tax

Tribunal overturns Commissioner's order on service tax demand & penalty, remands for comprehensive review

The Tribunal allowed the Revenue's appeal against the Commissioner's order setting aside the demand for service tax and penalty imposition. The ... Scope of SCN - Revenue issued a SCN to the respondent ascertaining that they are also involved in providing maintenance and repair services without registration and were not paying service tax on the same - Held that: - the SCN clearly pointed out that the common area maintenance charges (CAM) have been collected to take care of electricity, water and AMC (Annual Maintenance Contract) charges for equipment like, lifts, motor pumps, etc. and insurance charges apart from miscellaneous repair and replacement charges also. The impugned order does not deal with all aspects of the charges but deals only with water, electricity charges. The impugned order is not correct as it should deal with the issues raised in the show-cause notice. The matter is remanded to the Commissioner (Appeals) for fresh decision after examining all the heads of expenses identified in the SCN. Issues:- Appeal against the order of the Commissioner setting aside demand of service tax and penalty imposition- Dispute over the demand of service tax on various charges collected by the respondent- Limitation period for issuing show-cause noticeAnalysis:1. The appeal was filed by the Revenue against the Commissioner's order setting aside the demand of service tax and penalty imposition. The respondent, a registered service provider, was accused of providing maintenance and repair services without registration and not paying service tax on them. The Commissioner's decision was limited to the demand of service tax on electricity and water charges recovered from tenants, which the appellant argued was not the only issue in dispute.2. The appellant contended that the charges collected included repair and maintenance charges, house-keeping charges, security charges, common area electricity charges, and insurance charges. Reference was made to a previous case involving Kumar Builders, which was under appeal at the High Court. The absence of a stay in that case was acknowledged. The appellant argued that the Commissioner's decision did not address all aspects of the charges raised in the show-cause notice.3. The respondent relied on a Tribunal decision in the case of Shilpa Colour Lab to argue that electricity charges should not be included in the assessable value. This decision was upheld by the Supreme Court. Moreover, the respondent pointed out that the show-cause notice issued in 2012 for the period 2006-2008 was beyond the normal period of limitation.4. Upon reviewing the submissions, the Tribunal found that the show-cause notice highlighted various charges collected by the respondent, including common area maintenance charges for electricity, water, annual maintenance contract charges, insurance charges, and repair and replacement charges. The Tribunal concluded that the Commissioner's order did not address all the issues raised in the show-cause notice, specifically focusing only on water and electricity charges. Therefore, the Tribunal set aside the impugned order and remanded the matter to the Commissioner for a fresh decision considering all heads of expenses identified in the show-cause notice.5. The Tribunal pronounced its decision on January 31, 2018, disposing of the cross objection as well.