2014 (5) TMI 577 - AT - Service Tax

Services of maintenance of greenery on road divider - Held that - Services in relation to the maintenance of road divider is covered under the provisions of Section 97 of the Finance Act, and the garden which is part of the Raj Bhavan forms part of the Government building. Accordingly, this maintenance service is exempt under Section 98 of the Finance Act. It is vehemently argued by the appellant that the appellate Commissioner have failed to consider the case under Sections 97 & 98 and ordered pre-deposit without considering the important aspect in this case - In the interest of justice, the appellate Commissioner should have considered the applicability of the Sections 97 & 98 before passing any order for pre-deposit as the same goes to the root of the matter. Thus, the impugned orders of Commissioner (Appeals) are set aside - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of Sections 97 and 98 of the Finance Act regarding exemption for maintenance services provided by the appellants.
2. Validity of the order for pre-deposit issued by the Commissioner (Appeals).
3. Consideration of Sections 97 and 98 before passing any order for pre-deposit.

Analysis:
1. The judgment involved a dispute regarding the applicability of Sections 97 and 98 of the Finance Act to the maintenance services provided by the appellants. The appellants were engaged in maintaining greenery on road dividers and gardens belonging to the government of Maharashtra. The adjudicating authority had rejected the contention that services provided in respect of roads are exempted under Section 97 and maintenance of the Raj Bhavan garden is exempted under Section 98. However, the tribunal held that services related to the maintenance of road dividers fall under Section 97, while the garden maintenance, being a part of the Government building, is exempt under Section 98.

2. The appellants had appealed the order of the Commissioner (Appeals) who directed them to pre-deposit a certain amount. The tribunal found that the Commissioner had failed to consider the case under Sections 97 and 98 before ordering the pre-deposit. As a result, the tribunal set aside the orders of the Commissioner (Appeals) and directed a hearing on merit without any pre-deposit, allowing the appeal by way of remand.

3. The tribunal emphasized that the appellate Commissioner should have considered the applicability of Sections 97 and 98 before passing any order for pre-deposit, as these sections were crucial to the case. By setting aside the impugned orders and allowing the appeal by way of remand, the tribunal ensured that the case would be heard on its merits without any pre-deposit requirement, thereby serving the interest of justice. The stay application was also disposed of in the judgment.