Lakeview Developers vs Commissioner Of Central Excise, Thane I

(Arising out Order-in-Original No. 41/BR-41/ST/TH-I/2011 dated 30.08.2011 passed by the Commissioner of Central Excise, Thane I)

For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

1. Whether Press Reporters may be allowed to see No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy Yes of the Order?

4. Whether Order is to be circulated to the Departmental Yes authorities?

Lakeview Developers Appellant

Vs.

Commissioner of Central Excise, Thane I Respondent

Appearance:

Shri S.S. Gupta, CA for the appellant Shri S.R. Nair, EO (AR) for the respondent

CORAM:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of hearing : 15-09-2015 Date of decision : 15-09-2015

O R D E R No:..

Per: M.V. Ravindran:

This appeal is directed against Order-in-Original No. 41/BR-41/ST/TH-I/2011 dated 30.08.2011.

2. Heard both sides and perused the record.

3. The issue involved in this case is tax liability on the appellant under the category of Goods Transport Agency as also Management, Maintenance or Repair services.

4. As regards the Goods Transport Agency service we find that the appellants representative has conceded the demands and they have paid their tax liability and submit that the same has been discharged before the issuance of show-cause notice along with interest. We find that there is slight difference in the amount confirmed as per the Order-in-Original and the amount paid by the appellant. It was pointed out that this is due to the calculation error made by the lower authorities. We find that the services are taxable in the hands of the appellant under the reverse charge mechanism and to that extent we uphold the demand of service tax liability and interest thereof. We direct the lower authorities to work out the correct tax liability and if the amount paid by the appellant before the issuance of show-cause notice is correctly calculated, accept the same. Since the issue involved was of interpretative nature, we set aside the penalties imposed on the appellant on this count.

5. As regards the service tax demand under Management, Maintenance or Repair services, we find that the said demand is on the maintenance charges collected from the tenants to whom property is given on rent and also an amount calculated by the appellant from the individual flat owner/shop owners. In an identical issue in respect of Crescendo Associates and Hiranandani Builders, we following the ratio of this bench in the case Kumar Beheray Rathi 2013-TIOL-1806-CESTAT-MUM held that the service tax liability on the maintenance charges collected is not taxable under Management, Maintenance or Repair services. We do not find any reason to deviate from such a view already taken. At the same time, since there is a claim of the CA that the amount confirmed by the lower authorities under the category includes service tax liability on maintenance charges collected from tenants to whom the flats are given on rent needs to be recalculated, and the tax liability needs to be discharged. We find the prayer is acceptable and for the limited purpose of calculating the service tax liability on the appellant under the category of Management, Maintenance or Repair services, collected from the flats given on rent, we remit the matter back to the Adjudicating Authority to do so after following the principles of natural justice. Since the issue was of interpretative nature, we find that there is no reason to visit the appellant with any penalties.

6. Accordingly, the appeal is disposed of as indicated hereinabove.

(Operative part pronounced in Court)

(C.J. Mathew) (M.V. Ravindran) Member (Technical) Member (Judicial)

//SR

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