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Crescendo Associates And Hiranandani Builders Versus Commissioner of Service tax, Mumbai

2015 (11) TMI 1046 - CESTAT MUMBAI

Demand of service tax - Management, Maintenance or Repair services - appellant (builder) collected an amount from the flat owners which is titled as towards Management, Maintenance or Repair of the premises - Held that:- As regards the Management, Maintenance or Repair services, we find that it is undisputed that the said amounts are collected by the appellant as a builder for the common maintenance of building as well as the entire premises of the apartment. We find that it is undisputed that t .....

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ies are for the members of the society as and when formed; secondly the entire premises is transferred to society of members, on execution of conveyance deed. The impugned order to that extent is set aside - Decided in favour of assessee. - Appeal No.ST/540/11- Mum & Appeal No.ST/647/11- Mum - Dated:- 15-9-2015 - Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) For the Petitioner ; Shri S.S. Gupta, CA For the Respondent : Shri S.R. Nair, EO (AR) ORDER Per: M.V. Ravin .....

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es. 5. It is undisputed that the appellants are builders and on construction of the residential premises handover the same to the individual flat owners. During the interregnum period till the flats are handed over to the individual flat owners and the cooperative society is formed, by the flat owners, the appellant collected an amount from the flat owners which is titled as towards Management, Maintenance or Repair of the premises. It is the case of the revenue that the amount so collected by t .....

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as followed by the bench again in Goel Nitron Constructions 2015-TIOL-1787-CESTAT-MUM he produces a copy of the said judgment. As regards the service tax liability under the Goods Transport Agency service, he submits that they are not contesting the issue and they have already paid the entire amount along with interest before the issuance of show-cause notice. He would submit that penalties imposed on this count be set aside. 7. Ld. Departmental Representative submits that the appellant had coll .....

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se the said amount is not transferred to the society hence that needs to be taxed. He would submit that in respect of Goods Transport Agency service both the appellants have not paid the correct amount confirmed as per the show-cause notice. 8. On consideration of the submission made by both sides, we find that since both the appellants are not contesting the service tax liability under the Goods Transport Agency service seriously, we uphold the service tax liability and interest thereof. 9. Ld. .....

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ccept the amount paid by them before the issuance of show-cause notice. As regards the penalties imposed in the issue of Goods Transport Agency we find that the issue being agitated before the higher judicial forum there is no need to visit the appellant with the penalty. Invoking the provisions of section 80 of the Finance Act, 1994 we set aside the penalties imposed by the lower authorities. 10. As regards the Management, Maintenance or Repair services, we find that it is undisputed that the s .....

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o the present issue as services and situations context discussed are totally different. We find that as per the agreement submitted by the appellants, certain amounts were collected from the buyers of the flats as one time deposit on account of the following services:- (a) Towards maintenance and repairs of common areas and facilities; (b) Wages of watchmen, sweepers etc. (c) Insurance (d) Revenue assessment (e) All other taxes, levies, charges and cess. (f) Electricity and water charges and dep .....

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repair of common areas and facilities, wages or watchmen, sweepers etc. and some expenses relating to maintenance of the housing blocks. 6.2 We have also gone through the relevant provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of construction, sale, management and transfer) Act, 1963. We find that the Section 5 and 6 provides as under:- SECTION 05: PROMOTER TO MAINTAIN SEPARATE ACCOUNT OF SUMS TAKEN AS ADVANCE OR DEPOSIT AND TO BE TRUSTEE THEREFOR; AND DISBURSE THEM F .....

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rances, if any); and he shall hold the said moneys for the purposes for which they were given and shall disburse the moneys for those purposes and shall on demand in writing by an officer appointed SECTION 06: RESPONSIBILITY FOR PAYMENT OF OUTGOINGS TILL PROPERTY IS TRANSFERRED. A promoter shall, while he is in possession and where he collects from persons who have taken over flats or are to take over flats sums for the payment of outgoings ever thereafter, pay all outgoings (including ground re .....

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to the organization of any such persons, the promoter shall continue to be liable, even after the transfer of the property, to pay such outgoings and penal charges (if any) to the authority or person to whom they are payable and to be responsible for any legal proceedings which may be taken therefor by such authority or person. From the above sections, it is clear that under the Act the appellants are obliged to maintain a separate account in any bank of the deposits taken and use the same amoun .....

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