Tribunal Rules No Service Tax Due on Water Supply, Maintenance Fees from Resident Welfare Society.

The Tribunal held that the appellant is not liable to pay service tax on the amounts received from the Resident Welfare Society for water supply and maintenance services. It concluded that such services do not fall under the taxable category of Management, Maintenance, or Repair as per Section 65(64) of the Finance Act, 1994. The demand for service tax, along with interest and penalty, was deemed unsustainable. Consequently, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant.

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Issues:
The issue involves whether the appellant is liable to pay service tax on the amount received from the resident/members of the Society against supply of water and maintenance of water filtration, lifting, storage system under the Contract.

Details of Judgment:

1. The appellant challenged the Order-in-Appeal passed by the Commissioner, who confirmed the demand as raised in the show cause notice.

2. The Department claimed that the amount received by the appellant from the Resident Welfare Society against water supply and maintenance is chargeable to service tax.

3. The show cause notice was issued under the category of Management, Maintenance or Repair as per Section 65(64) of the Finance Act, 1994.

4. The Adjudicating Authority confirmed the demand, which was challenged by the appellant before the Commissioner (Appeals) and subsequently in the present appeal.

5. Previous decisions by various High Courts and the Tribunal were cited to support the appellant's case, stating that services provided to members are not taxable under the category of Management, Maintenance, or Repair as per Section 65(64) of the Finance Act.

6. The Tribunal referred to a previous decision where it was concluded that services provided to members would not fall within the taxable category, and the consideration received would not be exigible to service tax.

7. Consequently, the Tribunal held that the appellant is not liable to pay service tax under Section 73(2) of the Finance Act, and thus, the demand of interest and penalty is not sustainable.

8. The impugned order was set aside, and the present appeal was allowed.

[Operative portion already pronounced in open court]

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