Tribunal partially allows appeal on construction service demand, remands maintenance issue for further investigation.

The Tribunal partially allowed the appeal, setting aside the demand under construction of residential complex service and remanding the issue of demand under management, maintenance, or repair service for further investigation by the adjudicating authority.

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Issues:
1. Demand raised under construction of residential complex service.
2. Demand raised under management, maintenance, or repair service.

Analysis:

Construction of Residential Complex Service:
The appellant, a partnership firm engaged in construction activities, was issued a show cause notice for not properly discharging service tax under construction of residential complex service and management, maintenance, or repair service. The appellant argued that the demand under construction of residential complex service cannot sustain as the contracts are composite in nature involving both supply of materials and services. The Tribunal agreed with the appellant, citing precedents and the decision of the Apex Court in Larsen & Toubro Ltd., holding that service tax on such composite contracts would not be sustainable. The Tribunal set aside the demand under construction of residential complex service, emphasizing that the decision in G.D. Builders case, relied upon by the department, was no longer valid law post the Apex Court ruling.

Management, Maintenance, or Repair Service:
Regarding the demand under management, maintenance, or repair service, the appellant collected a lump sum amount transferred to the flat owners' association, along with maintenance charges. The Tribunal noted that the amount collected for management, maintenance, and repair services would be subject to service tax if not part of the transferred corpus. However, the exact details of the corpus transfer and the amount collected by the appellant were not clear. Therefore, the Tribunal remanded this issue to the adjudicating authority for further examination. The impugned order was set aside partially, with the demand under management, maintenance, or repair service being remanded for review.

In conclusion, the Tribunal partially allowed the appeal, setting aside the demand under construction of residential complex service and remanding the issue of demand under management, maintenance, or repair service for further investigation by the adjudicating authority. The judgment was pronounced on 17/01/2019 by the Bench comprising Ms. Sulekha Beevi C.S., Member (Judicial), and Shri Madhu Mohan Damodhar, Member (Technical).

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