2023 (11) TMI 1074 - AT - Service Tax

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

M/s. The Mahima Panorama Resident Welfare Society, Jaipur (Rajasthan) Versus Commissioner of Central Excise & Customs, Central Goods and Service Tax, Jaipur (Rajasthan).

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 ... Levy of Service Tax - amount received from the resident/members of the Society against supply of water and maintenance of water filtration, lifting, storage system under the Contract - HELD THAT:- The issue has been decided by the Gujarat High Court in SPORTS CLUB OF GUJARAT LTD VERSUS UNION OF INDIA & 3 [2013 (7) TMI 510 - GUJARAT HIGH COURT], Jharkhand High Court in RANCHI CLUB LTD. VERSUS CHIEF COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX [2012 (6) TMI 636 - JHARKHAND HIGH COURT] and also by this Tribunal in M/S FEDERATION OF INDIAN CHAMBERS OF COMMERCE AND INDUSTRY, M/S ELECTRONIC AND COMPUTER SOFTWARE EXPORT PROMOTION COUNCIL VERSUS CST, DELHI [2014 (5) TMI 183 - CESTAT NEW DELHI]. The same have been followed in a later order by the Principal Bench in CST, DELHI VERSUS DLF GOLF RESORTS LIMITED AND VICE VERSA [2015 (11) TMI 1663 - CESTAT, NEW DELHI], inter alia, observing that the services provided to its members are not taxable under the category of Management, Maintenance or Repair as per Section 65(64) of the Finance Act. The present case is squarely covered by these decisions and does not call for any further interpretation. Thus, the appellant is not liable to pay service tax under Section 73(2) of the Finance Act and, therefore, the demand of interest under Section 75 and penalty under Section 78 is not sustainable - the impugned order set aside - appeal allowed. 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]