Service tax valuation turns on actual consideration received, with reimbursements and maintenance deposits excluded from taxable value.

Only consideration actually received for a taxable service is includible in value, so actual reimbursements for management, maintenance, repair and electricity charges are treated as outside the taxable base where collected on a pure-agent or reimbursement basis. Maintenance deposits held for transfer to a society or refund are not service consideration. Advances received before July 2010 are described as outside tax under the then applicable exemption regime, while later advances require recomputation on the net balance basis. Amounts linked to pre-July 2010 construction services, cancellation receipts and sale of investment property are treated as non-taxable because they do not represent consideration for a taxable service. Interest and tax on renting of immovable property and builder's special service are stated to remain payable, subject to adjustment of excess payment.

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Issues: (i) Whether service tax demand on renting of immovable property and the corresponding interest were sustainable, including adjustment of excess payment; (ii) Whether reimbursements towards management, maintenance and repair charges and electricity charges were includible in the taxable value; (iii) Whether maintenance deposits were liable to service tax; (iv) Whether administrative income and advances received, including pre-July 2010 advances and related receipts such as cancellation amounts and sale of investment property, were taxable; and (v) Whether the demand of interest on builder's special service was sustainable.

Issue (i): Whether service tax demand on renting of immovable property and the corresponding interest were sustainable, including adjustment of excess payment.

Analysis: The excess service tax and excess interest paid under the renting head were acknowledged in the adjudication order. The demand of service tax under this head was upheld, while the excess payment was directed to be adjusted against liabilities arising under the order. The interest demand was also upheld, with adjustment permitted only to the extent of excess interest already paid.

Conclusion: The demand under renting of immovable property service and the corresponding interest were sustained, subject to adjustment of excess payments in favour of the assessee.

Issue (ii): Whether reimbursements towards management, maintenance and repair charges and electricity charges were includible in the taxable value.

Analysis: The amounts recovered towards repairs, maintenance and electricity were found to be actual reimbursements and not consideration for an independent taxable service. The valuation principle applied was that only the consideration for the taxable service can be brought to charge, and reimbursable expenses on actual basis are outside the taxable value. Electricity recoveries were also treated as amounts collected and remitted as a pure agent.

Conclusion: The demands on management, maintenance and repair charges and electricity charges were set aside in favour of the assessee.

Issue (iii): Whether maintenance deposits were liable to service tax.

Analysis: The maintenance deposits were treated as advances towards sinking fund or development fund, to be transferred to the society or refunded, and not as amounts received for any taxable service. There was no material showing that the appellant had used the deposits as consideration for service.

Conclusion: The demand on maintenance deposits was set aside in favour of the assessee.

Issue (iv): Whether administrative income and advances received, including pre-July 2010 advances and related receipts such as cancellation amounts and sale of investment property, were taxable.

Analysis: No actual receipt of the administrative income was established, and the mere journal entry was found insufficient to fasten tax liability. Advances received before July 2010 were held not taxable under the then applicable exemption regime. For the remaining advances for financial year 2011-12, the matter was remanded to determine the net taxable amount on the basis of the difference between closing and opening balances. Amounts linked to construction service provided prior to July 2010, cancellation of cheque or flat, and sale of investment property were held not to bear tax liability as they did not represent taxable consideration for a service.

Conclusion: The demands on administrative income, pre-July 2010 advances, construction receipts prior to July 2010, cancellation amounts and sale of investment property were set aside in favour of the assessee, while the advance-related demand for financial year 2011-12 was remanded for re-computation.

Issue (v): Whether the demand of interest on builder's special service was sustainable.

Analysis: The substantive tax demand under builder's special service was not challenged, and the plea for waiver of interest was rejected. However, the interest liability was directed to be adjusted against excess interest payment already identified in the order.

Conclusion: The interest on builder's special service was sustained, subject to adjustment of excess interest payment.

Final Conclusion: The appeal succeeded in substantial part, with multiple demands annulled, one demand upheld with adjustment rights, and one advance-related issue sent back for recomputation of the taxable value.

Ratio Decidendi: Only consideration actually received for a taxable service forms part of the taxable value; reimbursable expenses, deposits held for transfer or refund, and amounts unsupported by actual receipt do not attract service tax.

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