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Consult Construction

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2015-VIL-403-CESTAT-DEL FREE-ST

  • Service Tax - Contract for management and maintenance of parks and road side plantation and maintenance – Demand under management, maintenance or repair

 

  • HELD - The Commissioner (Appeals) clearly noted that with effect from 1.5.2006 the change in definition of ‘management, maintenance or repair’ brought ‘maintenance or repair of properties whether immovable or not’ within the scope of ‘management, maintenance or repair service’ and accordingly confirmed the impugned demand for the period with effect from 1.5.2006. While there can hardly be any doubt that ‘roads, airports, railway, building, parks, electrical installation and the like’ are clearly immovable properties and therefore management maintenance or repair of such properties is clearly liable to service tax, even if it is contended, as indeed has been done by the appellant, that maintenance of trees, grass etc. cannot be called in the category of maintenance of immovable property, the impugned demand would be sustainable even in the wake of such contention as maintenance or repair of even non-immovable properties was brought under the scope of management, maintenance or repair service with effect from 1.5.2006
  • The impugned service is liable to service tax under management, maintenance or repair service and the appellant is guilty of suppression of facts - Matter remanded to the Commissioner (Appeals) with the direction that the impugned service tax liability may be recomputed after extending the benefit of Notification No. 12/2003-ST in respect of supply of goods (like trees/shrubs/climbers etc.) provided the conditions of the said Notification No. 12/2003-ST are satisfied – Assessee appeal dismissed
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32




CESTAT, BANGLORE BENCH

Phoenix IT Solutions Ltd. (vs) Commissioner of Central Excise*, Visakhapatnam

Section 65(104c) of the Finance Act, 1994 - Business - Support services - Period 1-7-2003 to 30-9-2006 - Assessee under agreements with electricity companies provided billing and accounting services - In terms of contract, electricity department had to provide meter reading books on prescribed dates and assessee was required to enter data of meter readings, verify same, incorporate it in computer master and process bills - Whether above activity was classifiable under 'support services of business or commerce' - Held, yes [Para 18]
Sections 65(64) of the finance Act, 1994- Management, maintenance or repair service - Period 1-7-2003 to 30-9-2006 - Assessee provided software maintenance services to electricity companies, such as e-care maintenance, website maintenance and database maintenance - Commissioner held that said services would be taxable under maintenance and repair service with effect from 9-7-2004 - However, Explanation inserted in section in section 65(64) with effect from 1-6-2007 clarified that 'goods' would include computer software - Whether it would not be appropriate to apply said Explanation retrospectively and levy service tax with effect from 9-7-2004 - Held, yes - Whether, therefore, software maintenance service provided by assessee would be taxable only from 1-6-2007 - Held. yes [Para 13]
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10

CESTAT, BANGLORE BENCH

Phoenix IT Solutions Ltd. (vs) Commissioner of Central Excise*, Visakhapatnam

Sections 65(64) of the finance Act, 1994- Management, maintenance or repair service - Period 1-7-2003 to 30-9-2006 - Assessee provided software maintenance services to electricity companies, such as e-care maintenance, website maintenance and database maintenance - Commissioner held that said services would be taxable under maintenance and repair service with effect from 9-7-2004 - However, Explanation inserted in section in section 65(64) with effect from 1-6-2007 clarified that 'goods' would include computer software - Whether it would not be appropriate to apply said Explanation retrospectively and levy service tax with effect from 9-7-2004 - Held, yes - Whether, therefore, software maintenance service provided by assessee would be taxable only from 1-6-2007 - Held. yes [Para 13]

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42

HIGH COURT OF MADRAS

R. Devarajan (vs.) Union of India

Section 65(64) of the Finance Act, 1994 - Management, maintenance or repair service - Assessee was engaged in providing maintenance and repair service - Respondent - Departmental authorities issued summons to assessee requiring it to furnish certain information - In instant writ, assessee challenged issuance of said summons on ground that same were issued without jurisdiction - It was further contended that Central Government itself has granted exemption in respect of activities carried on by assessee by exemption Notification No. 24/2009, dated 27-7-2009 with retrospective effect and, hence, he had no liability to pay service tax, and, therefore, summons issued by respondents were without jurisdiction - Whether  since Act itself is self-contained Code provided for hierarchy of appeals, it was unnecessary to entertain writ petition at stage of summons and same was to be dismissed - Held, yes [Paras 9 & 10]

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49

HIGH COURT OF ALLAHABAD

Surya Transformers (vs) Union of India

Section 65(64) of the Finance Act, 1994 - Management, maintenance or repair service - Petitioner had entered into a contract with Respondent No. 6 for repairing and testing of aluminum wound damaged distribution transformers of 25 to 250 KVA capacities - Petitioner was paying service tax on labour charges - A show-cause notice was issued to petitioner on ground that contract was a composite contract for repair and maintenance and, therefore, service tax was payable on composite price of such contract - Petitioner filed a writ petition challenging said show-cause notice issued with view to levy service charges on composite price was wholly unjustified and without jurisdiction - Whether, on terms and conditions of contract, authority concerned had to decide whether contract was composite contract and service tax was leviable on entire amount or only on labour charges - Held, yes - Whether no jurisdictional error had been shown in issuing impugned show-cause notice - Held, yes - Whether show-cause notice did not reveal that authority had adjudicated matter finally; he had taken only a prima facie view and sought reply of petitioner - Held, yes - Whether, therefore, instant Court declined to interfere in matter - Held, yes - Whether, however, authority concerned was to be directed to decide matter expeditiously  as early as possible on consideration of reply of petitioner in accordance with law - Held, yes [Para 5, 6 and 7]

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23

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