2017 (8) TMI 519

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....herefore show cause notice was issued demanding service tax along with interest and also for imposing penalty. After due process of law, the original authority confirmed the demand of Rs. 1,24,28,623/- for the period 16.6.2005 to 31.3.2007 under the category of Construction of Residential Complex Service as well as Management, Maintenance and Repair Service along with interest and also for imposing penalty under section 76 of the Finance Act, 1994 besides imposing penalty of Rs. 1,000/- under section 77 and penalty of Rs. 1,50,00,000/- under section 78 of the Act ibid. The amount already paid by the appellant was ordered to be appropriated. Hence this appeal. 2. At the time of hearing, the learned counsel Shri Derrick Sam appearing on beha....

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....the allottee will have to recoup it. That if this amount is taxed, it will amount to double taxation for the same activity. 3. Again, he submitted that an amount of Rs. 13,04,280/- shown in Annexure A5 towards maintenance charges for Rain Tree Project has not been collected by the appellant at the relevant time as the project was not completed. That the department has taken the said amount from the agreement and not from the appellant s accounts. That since the appellant has not collected the amount, levy of service tax of this amount is not maintainable. 4. The third issue raised is that an amount of Rs. 9,87,216/- is collected as maintenance charges towards the project Courtyard and the same is liable to service tax and is not contested....

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.... judgment is reproduced below:- "9. In view of the above, though in view of the Apex Court judgment in the case of M/s. Larsen & Toubro Limited and Others v. State of Karnataka & Others (supra), the agreements entered into by a builder/promoter/developer with prospective buyers for construction of residential units in a residential complex against payments being made by the prospective buyers in instalments during construction and in terms of which the possession of the residential unit, is to be handed over to the customers on completion of the residential complex and full payment having been made, are to be treated as works contracts, it has to be held that during the period of dispute, there was no intention of the Government to tax the....

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....e demand made under maintenance and repair services on the corpus fund collected by the appellants. It is submitted by the learned counsel that this is only a deposit and not received as charges for any services rendered. According to appellant, it is a deposit made by the allotee and in the event of their failure to pay the maintenance charges, the unpaid amount would be set off against the said deposit. In the impugned order, it is observed that, at any point of time, even if appellant pays service tax on this fund, and if the corpus fund is refunded / transferred, suitable adjustment in tax liability can be made. It is therefore clear that the corpus fund, even according to the department is not collected for rendering any service of mai....