TaxTMI 
TaxTMI 
2025 (8) TMI 171
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....e assessee under Section 75 of the Finance Act, 1944. 3. I impose a penalty of Rs. 7,08,087/- (Rs. Seven Lakhs Eight Hundred and Eighty Seven, only) upon the assessee under Section 78 of the Finance Act, 1944. However, benefit of reduced penalty of 25% of the penalty imposed, as per clause (ii) of second proviso to Section 78(1) ibid, is available to the assessee subject to the condition that the amount of service tax held payable along-with interest so determined is paid within thirty days from the date of communication of this order and further subject to the condition that the benefit of reduced penalty shall be available if the amount of penalty so determined has also been paid within the period of thirty days from the date of communication of the order." 2.1 Appellant is engaged in providing service of construction of complex services. During the course of audit of records of the appellant, it was found that they were collecting interest free maintenance deposit (IFMS) from its customers on which no service tax was paid. 2.2 A Show Cause Notice dated 04.02.2014 was issued to the appellant for the period 01.04.2012 to 30.06.2012 demanding service tax of Rs.1,27,0....
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....ooks of accounts for the concerned period; the appellant had not expended or used the amount received as maintenance deposits for any purposes which is clearly evident from the ledger account of maintenance deposits. 8. I find that the service has defined in clause 44 of the section 65B as:- (44) "Service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely, -- (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; (ii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force. Explanation 1. - For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply to,-- (A) the functions performed by the Members of Parliament, Members of State Legislative, Members of Panchayats, Members of Municipalities and Members of other lo....
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....ies two things (i) a list of services which will not be subject to service tax (ii) other than the services mentioned in the negative list, all services will be taxable which fall within the definition of service. Further the Central Government has exempted many of the services from the levy of service tax vide mega exemption notification 25/2012-ST dated 20.06.2012 amended. 10. It is seen that, in a similar case, the Hon'ble CESTAT in the case of M/s. SOBHA DEVELOPERS LTD. Versus COMMR. OF C. EX. & S.T., LTU, BANGALORE [2017 (51) S.T.R. 319 (Tri. - Bang.)] has held that Stay/Dispensation of pre-deposit - Maintenance or Repair service - Maintenance builder of property, residential complex collecting maintenance deposits for maintenance of property till majority of apartments occupied, formal resident association becomes functional and takes over regular maintenance and repair of complex - Maintenance deposits paid by buyers in terms of agreement for carrying out maintenance of immovable property - Prima facie evident that assessee rendering service under Section 65(64) of Finance Act, 1994 and Service Tax required to be paid - Section 35F of Central Excise Act....
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....ant as such do not provide any maintenance services and reflect the amount so collected as liability in their books of accounts. 4.4 This issue has been considered time and again by the Tribunal holding that service tax would not be leviable on such charges reference is made to the decision of Commissioner (Appeals) in appellant's own case for the period wherein as has been held: "7. I observe that the OIO has come to conclusion that the appellant having collected an amount from the prospective flat buyers towards management, maintenance or repair service, tax liability would arise; that the maintenance charges recovered from the prospective purchasers of flat in residential building as well' as commercial building were liable to be taxed as the definition does not make any distinction on the basis whether the service has been rendered to the purchasers or owners of the residential units or commercial units. The,OIO has confirmed the demands raised along with interest and also imposed penalties. 8. I find that the appellants are engaged in providing service of Construction of Complex Service and not in the business of maintenance or repair service, or manag....