2013 (11) TMI 397 - AT - Service Tax

Cleaning services for educational institutions Waiver of Pre-deposit - Whether it is excluded from the scope of cleaning service u/s 65(24b) r.w. Section 65(105)(zzzd) of the Finance Act, 1994 or not Held that - The bills indicate that the charges have been made for cleaning work of the premises or the gardening works in the premises - As per Section 65(24b), cleaning services undertaken in respect of non-commercial buildings and premises are not liable to Service tax similarly services rendered to agriculture, horticulture, animal husbandry or dairying is also excluded from the purview of Service Tax - Prima facie the appellant has made out a case for waiver of pre-deposit - unconditional waiver from pre-deposit of the dues granted stay granted.

Summary

Issues:
Service Tax demand on cleaning services rendered by the appellant to educational institutions of D.Y.Patil Group.

Analysis:
The appellant, M/s Madhur Enterprises, Pune, faced a Service Tax demand of Rs.39,00,446/- along with interest and penalty for services provided from June 2005 to April 2008. The appellant argued that the cleaning services provided to educational institutions fell outside the scope of cleaning services as defined under Section 65(24b) and Section 65(105)(zzzd) of the Finance Act, 1994. The appellant contended that the demand under 'Supply of Manpower Services' was legally unsustainable.

The lower appellate authority upheld the Service Tax demand, leading the appellant to appeal before the Appellate Tribunal CESTAT Mumbai. The appellant's counsel argued that the cleaning services provided were excluded under the relevant sections of the Finance Act, thus not subject to Service Tax. On the other hand, the Deputy Commissioner (AR) representing the Revenue reiterated the lower authorities' findings.

Upon hearing both parties and examining the bills submitted by the appellant to the service recipient, which showed charges for cleaning and gardening works at D.Y.Patil Educational Institution, the Tribunal analyzed the provisions of Section 65(24b). It was noted that cleaning services for non-commercial buildings, premises related to agriculture, horticulture, animal husbandry, or dairying are exempt from Service Tax. The Tribunal found that the appellant had a valid argument for waiver of pre-deposit, leading to the grant of unconditional waiver from pre-deposit of the dues adjudged against the appellant. Additionally, the Tribunal stayed the recovery of the dues during the appeal's pendency.

In conclusion, the Tribunal ruled in favor of the appellant, granting a waiver from pre-deposit and staying the recovery of the disputed Service Tax demand on the grounds that the cleaning services provided to educational institutions fell within the exemptions outlined in the Finance Act, 1994.