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2018 (12) TMI 1780 - AT - Service TaxClassification of services - cleaning services or not - evacuation of certain Ash from the fly ash pond of Kolaghat Thermal Power Station under West Bengal Power Development Corpn. Ltd. - HELD THAT - The issue is no more res integra and has been decided by the Tribunal in the case of M/S. COMMISSIONER OF CENTRAL EXCISE SERVICE TAX-RANCHI VERSUS M/S. HINDUSTAN STEEL WORKS CONSTRUCTION LTD. 2018 (11) TMI 1217 - CESTAT KOLKATA where reliance placed in decision of this Bench in the case of M/s. Calcutta Industrial Supply Corporation Vs. Commissioner of Service Tax Kolkata 2017 (11) TMI 158 - CESTAT KOLKATA where it was held that It appears that the purpose of the tender is for disposal of Ash in the abandoned mines of ECL. The appellant is engaged for transportation and disposal of Ash in the abandoned mines. The letter does not show that the appellant was engaged for cleaning of the premises. Therefore the demand of Service Tax under the category of cleaning service is not justified. Appeal allowed - decided in favor of appellant.
Issues:
- Classification of services as 'cleaning services' under Section 65 24 (b) of the Finance Act, 1994. Analysis: The appellant, a Local Body, was awarded a contract by the Govt. of West Bengal for the evacuation of Ash from a thermal power station's fly ash pond. The Adjudicating Authority confirmed a demand of &8377; 76,53,349/- with penalties under Sections 76 and 78 of the Finance Act, 1994. The appellant contended that the activities did not constitute 'cleaning' as alleged, arguing that the removal of fly ash was not for cleaning purposes but for operational reasons. The appellant highlighted that fly ash is a saleable good and not waste, capable of being sold in the market. The Tribunal referred to previous decisions and held that the excavation and transportation of fly ash did not fall under the definition of 'cleaning activity' under Section 65 24 (b) of the Finance Act, 1994. It was emphasized that the appellant was not engaged in cleaning the pond but in the removal of fly ash for specific utility, making it distinguishable from cleaning services. In a related case, the Tribunal had previously ruled that a similar activity of removing ash from ash ponds for transportation and disposal did not constitute a cleaning service. The Tribunal noted that the appellant's contract was primarily for transportation and disposal of ash, not for cleaning activities as defined under Section 65 24 (b). The Tribunal pointed out that the purpose of the tender was the disposal of ash in abandoned mines, not cleaning of premises. Therefore, the demand for Service Tax under the category of cleaning service was deemed unjustified. The Tribunal concluded that the facts of the present case aligned with the previous decision, leading to the setting aside of the impugned order and allowing the appeal filed by the appellant with consequential relief. In summary, the Tribunal examined the nature of the appellant's activities in removing fly ash from the thermal power station's ash pond and concluded that such operations did not constitute 'cleaning services' as defined under the Finance Act, 1994. The Tribunal's decision was based on the distinct purpose of the appellant's contract, which focused on the transportation and disposal of fly ash for specific utility rather than cleaning the premises. The Tribunal's analysis relied on previous judgments to support the classification of the appellant's services, ultimately leading to the allowance of the appeal and setting aside of the demand for Service Tax under the category of cleaning services.
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