2017 (5) TMI 1029

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..... present appeal relates to the period 16.06.2005 to 30.09.2009 with reference to non-payment of service tax by the appellant under the category of management, maintenance and repair service in respect of one of their projects of residential complex. 2. The brief facts of the case are that the appellants built a residential complex having multiple units. They have collected from their clients a fixed amount towards corpus fund in respect of each dwelling unit, apart from the consideration for construction of the residential unit. The said fund is to be transferred to the welfare association of residents, as and when formed, for maintenance and management of the said complex. As the project was on-going and the welfare association was yet to .....

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..... ng notional interest on such corpus fund is not supported by the law. The ld. Counsel also contested the demand on the question of time bar. He submitted that as the appellant did not receive any consideration from the occupants of the flats, they have, bonafidely, believed that there is no taxable service in maintaining the ongoing project. As such, he pleaded for setting aside the demand on the question of time bar and also setting aside various penalties imposed on them. 4. The ld. A.R. while reiterating the findings of the lower authorities submitted that the appellant did provide service of maintenance to various occupants of the residential complex. There is no direct consideration received for this. However, the occupants of the fla .....

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..... n of the flats, with a specific reason for transferring the same to the welfare association which will be in-charge of management and maintenance of the said complex. Till the formation of the association the appellants as a builder/ promoter did undertake the work of management / maintenance of the complex. As such, we are of the opinion that the appellant did provide taxable service to various occupants of the complex under tax entry of "management, maintenance and repair service" which specifically talks about management and maintenance of immovable properties. 7. Regarding the valuation of such taxable service, we find that the notional interest adopted by the Revenue will not form a proper basis. Admittedly, there is no evidence regar .....

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