2014 (1) TMI 91 - AT - Service Tax

Waiver of pre deposit - Manpower Recruitment or Supply Agency Services - Agreement for cleaning premises of D.Y. Patil Hospital & Research Centre - Held that - As per the agreement, the applicants are engaged in the Cleaning services of D.Y. Patil Medical Hospital and Research Institute. As per Section 65(105) of the Finance Act, 1994, the Cleaning service is taxable, if provided to any Commercial or Industrial institution. We have seen that the cleaning activities have been provided by the applicant to D.Y. Patil Medical Hospital & Research Institute, which is neither commercial nor a Industrial institution. Therefore, the activity undertaken by the applicant is not taxable - applicant has made out a case for 100% waiver of pre-deposit of Service tax - Stay granted.

Summary

Issues:
Waiver of pre-deposit of Service tax under the Finance Act, 1994 for activities categorized as "Manpower Recruitment or Supply Agency Services" versus "Cleaning services" under Section 65(105)(zzzd) of the Finance Act.

Analysis:
The judgment deals with the issue of waiver of pre-deposit of Service tax amounting to Rs. 91,83,978/- along with interest and penalties under the Finance Act, 1994. The case revolves around the classification of the applicant's activities as either falling under the category of "Manpower Recruitment or Supply Agency Services" or "Cleaning services" under Section 65(105)(zzzd) of the Finance Act.

The Revenue contended that the applicant's agreement for cleaning services at D.Y. Patil Hospital & Research Centre should be classified as Manpower Recruitment and Supply Agency Services, leading to the confirmation of demands against the applicant. However, the applicant argued that their activities should be considered as Cleaning services under Section 65(105)(zzzd) of the Finance Act, making the impugned demands unsustainable.

Upon examining the agreement between the parties, it was established that the applicant was engaged in providing cleaning services specifically to D.Y. Patil Medical Hospital and Research Institute. The Tribunal noted that as per Section 65(105) of the Finance Act, Cleaning services are taxable if provided to any Commercial or Industrial institution. In this case, since the cleaning services were provided to an entity that did not fall under the commercial or industrial category, the Tribunal concluded that the activity undertaken by the applicant was not taxable under the relevant provision.

Based on these findings, the Tribunal granted a 100% waiver of the pre-deposit of Service tax, thereby waiving the entire amount adjudged in the impugned order and staying the recovery during the pendency of the appeal. This decision was made after careful consideration of the nature of services provided by the applicant and the applicable provisions of the Finance Act, 1994.

In conclusion, the judgment highlights the importance of accurately categorizing services under the relevant provisions of the law to determine the tax implications. The Tribunal's decision to grant a waiver of pre-deposit was based on a thorough analysis of the facts and legal framework surrounding the case, ultimately providing relief to the appellant in this matter.