CESTAT allowed the appeal of a resident welfare association,...

CESTAT allowed the appeal of a resident welfare association, setting aside the service tax demand with interest and penalty. It held that electricity charges for common areas, billed in the association's name and recovered on a pro rata basis, constituted expenses incurred in providing common area management services and formed part of taxable value, not pure agent services. Conversely, water charges were treated as pure agent transactions and could not be included in taxable value. However, as the appellant had a bona fide belief, disclosed figures in ST-3 returns, and did not collect tax from members, invocation of the extended limitation period was impermissible, rendering the entire demand time-barred.