2013 (4) TMI 351 - AT - Service Tax

Service tax on Cleaning Services - assessee pleaded that services being rendered to the hospitals, religious and charitable institutions are not covered under the category of services as they are not commercial concerns hence no liability to service tax - Held that - The impugned order does not talk about the details of hospitals, religious and charitable institutions and non commercial concerns for coming to a conclusion whether these institutions are excluded from the definition of service. From the impugned order it is found that the lower authorities are recording that these details are not produced. Also Chartered Accountant plea that the value of the material has been included for the purpose of arriving at the service tax liability, is erroneous on the ground that the lower authorities in the subsequent show cause notices are issued demanding the service tax on the actual services rendered by them - the issue needs reconsideration by the adjudicating authority by appreciating all the pleas which the appellant takes before him.

Summary

Issues:
1. Waiver of pre-deposit of service tax amount with penalties.
2. Applicability of service tax on services provided to hospitals, religious, and charitable institutions.
3. Inclusion of the cost of materials in the levy of service tax liability.

Analysis:
1. The appellant filed a stay petition seeking the waiver of the balance amount of service tax, interest, and penalties totaling Rs. 49,89,095/-. The lower authorities confirmed the service tax liability under the category of Cleaning Services, which was upheld by the first appellate authority. The appellant had already deposited a partial amount of Rs. 16,96,689/ and sought waiver for the remaining balance. The Chartered Accountant argued that services provided to hospitals, religious, and charitable institutions should be excluded from service tax as they are not commercial concerns. On the other hand, the SDR contended that the cost of materials should be excluded from the value of services.

2. The Tribunal observed that the issue was narrow and could be resolved promptly. However, it noted that the impugned order did not address the details of services provided to hospitals, religious, and charitable institutions. The Chartered Accountant claimed that relevant details were submitted but not considered by the lower authorities. Additionally, the inclusion of material costs in determining the service tax liability was disputed. The Tribunal directed the adjudicating authority to reconsider the case, emphasizing the need to evaluate all pleas made by the appellant and to ensure the principles of natural justice were followed.

3. Consequently, the impugned order was set aside, and the matter was remitted back to the adjudicating authority for a fresh review. The appellant was instructed to provide evidence supporting their arguments. The Tribunal refrained from expressing any opinion on the case's merits, leaving all issues open for reconsideration. The decision highlighted the importance of a comprehensive examination of all aspects raised by the appellant and the necessity for a fair and just reconsideration by the adjudicating authority while adhering to procedural fairness.