2014 (5) TMI 423 - AT - Service Tax

Waiver of pre deposit - Cleaning service - cleaning the residential area i.e. township other than main hospital - Held that - As per the cleaning activity as provided under Section 65(24b) of the Finance Act means cleaning, including specialised cleaning services such as disinfecting, exterminating or sterilising of objects or premises, of - (i) commercial or industrial buildings and premises thereof; or (ii) factory, plant or machinery, tank or reservoir of such commercial or industrial buildings and premises thereof, but does not include such services in relation to agriculture, horticulture, animal husbandry or dairying - cleaning of township is not, prima facie, covered under the cleaning activity therefore prima facie the applicant has a strong case in its favour. Therefore the pre-deposit of dues is waived and recovery of the same is stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
- Application for waiver of pre-deposit of Service Tax
- Interpretation of the definition of cleaning activity under Section 65(24b) of the Finance Act
- Liability for service tax on providing cleaning services in institutions

Analysis:
The judgment revolves around the application for waiver of pre-deposit of Service Tax amounting to Rs. 5,81,496/-, interest, and penalty. The dispute arises from the nature of services provided by the applicant, specifically in the context of cleaning services rendered to Hindustan Aeronautics Ltd., Lucknow, and M/s. Sanjay Gandhi Post Graduate Medical Institute. The core issue pertains to the interpretation of the definition of cleaning activity as outlined in Section 65(24b) of the Finance Act.

Upon examining the definition of cleaning activity under Section 65(24b) of the Finance Act, the Tribunal notes that it encompasses specialized cleaning services for commercial or industrial buildings, machinery, and related premises. However, crucially, the definition explicitly excludes services related to agriculture, horticulture, animal husbandry, or dairying. In this context, the Tribunal observes that the cleaning of a township, as undertaken by the applicant, does not fall within the purview of the defined cleaning activity. Consequently, the Tribunal opines that prima facie, the applicant has a strong case in their favor regarding the applicability of service tax on the cleaning services provided by them.

The Revenue's argument asserting the liability of the applicants for service tax based on the provision of cleaning services in institutions is countered by the Tribunal's interpretation of the statutory definition. The Tribunal's analysis leads to the conclusion that the cleaning services offered by the applicant in the township do not align with the specified parameters of cleaning activity under the Finance Act. As a result, the Tribunal rules in favor of the applicant, granting a waiver of the pre-deposit of dues and staying the recovery process during the pendency of the appeal. The stay petition is allowed, providing interim relief to the applicant.

In summary, the judgment delves into the nuanced interpretation of the statutory provisions governing cleaning services to determine the liability for service tax. By dissecting the definition of cleaning activity under the Finance Act, the Tribunal elucidates the scope of applicability and exempts the applicant from immediate financial obligations, pending the resolution of the appeal.