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of <h1>Tribunal rules on tax demands for construction and maintenance services</h1> The Tribunal set aside the demand for service tax under Construction of Residential Complex Services due to the composite nature of contracts, while ... Construction of Residential Complex Services - non-payment of service tax - irregular availment of abatement as per Notification 1/2006-ST dt.1/3/2006 - period involved is from 2007 to March 2010 - Held that:- It is very much clear from the facts that the contracts are composite in nature - The Tribunal in the case of Real Value Promoters Pvt. Ltd. and Others [2018 (9) TMI 1149] has analysed the issue, whether the levy of service tax under Construction of Residential Complex Services or Commercial or Industrial Construction Services would be sustainable in the case of composite contracts which involve both element of services as well as supply of goods - demand set aside. Management, Maintenance and Repair services - amounts collected by the appellant from customers - Held that:- The appellants have collected the amounts from their customers for providing maintenance and repair services - the levy of service tax under this category does not call for any interference. Appeal allowed in part. Issues involved:1. Incorrect service tax discharge and abatement eligibility under Construction of Residential Complex Services.2. Demand for service tax under Management, Maintenance, and Repair services.3. Applicability of Notification 1/2006-ST.4. Composite contracts involving supply of goods and services.5. Collection of amounts for maintenance and repair services from customers.Detailed Analysis:1. The appellants, engaged in construction activities, were found to have incorrectly discharged service tax and availed abatement not eligible under Notification 1/2006-ST. The issue was whether the demand for service tax, interest, and penalties was justified. The Tribunal analyzed the nature of the contracts involved, determining them to be composite in nature. Citing a precedent, the Tribunal held that the demand under Construction of Residential Complex Services was unsustainable due to the composite nature of the contracts, thus setting aside the demand.2. Another issue was the demand for service tax under Management, Maintenance, and Repair services. The appellants had collected amounts from customers for these services. The Tribunal found this demand valid and declined to interfere, upholding the levy of service tax under this category.3. The Ld. Consultant for the appellant argued that the appellant had discharged service tax based on abatement applicable to goods supplied during construction activities. The argument was supported by citing a Tribunal decision in a similar case. Additionally, it was contended that no service tax was payable on amounts collected for maintenance and repair services.4. On the other hand, the Ld. AR supported the findings in the impugned order, stating that the appellants had collected amounts for management, maintenance, and repair services from customers, justifying the demand in this regard.5. Ultimately, the Tribunal modified the impugned order by setting aside the demand under Construction of Residential Complex Services while upholding the demand, interest, and penalties on Management, Maintenance, and Repair Services. The appeals were partly allowed based on the above analysis, with consequential reliefs granted accordingly. The judgment was pronounced in open court, concluding the case.
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