2018 (11) TMI 1217 - AT - Service Tax

Cleaning services or not - activity of excavation and transportation of fly ash from the pond, for channeling the slurry water-flow - levy of service tax - Board s Notification F. No. B1/6/2005-TRU dated 27/07/2005 - Held that - In the present case, the activity of excavation and transportation of fly ash from the pond, for channeling the slurry water-flow cannot be termed as cleaning activity in terms of Section 65 (24B) of the Finance Act. The Respondent is not clearing the fly ash with the objective of cleaning the pond or free the pond from contamination. Fly ash is being excavated and transported to the specified areas as per the contract. The issue in the present case is covered by the 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 dismissed - decided against Revenue.

Summary

Issues:
1. Whether the activity of excavation and transportation of fly ash constitutes "cleaning services" for the purpose of Service Tax liability.
2. Whether the removal of fly ash from the pond can be considered a cleaning activity under Section 65(24b) of the Finance Act, 1994.
3. Whether the fly ash being a saleable good affects its classification as a cleaning service.
4. Interpretation of the definition of "cleaning activity" under Section 65(24b) of the Finance Act.

Analysis:
1. The case involved a dispute regarding the classification of services provided by the Respondent-Assessee, involving the removal of ash from a power plant pond. The Revenue contended that these activities fell under the category of "Cleaning Services" attracting Service Tax liability.

2. The Respondent argued that the excavation and transportation of fly ash did not align with the definition of "cleaning activity" as per Section 65(24b) of the Finance Act. The Tribunal observed that the removal of fly ash was not aimed at cleaning the pond but for specific utility, being a saleable good used in manufacturing.

3. The Respondent further emphasized that fly ash's marketable nature distinguished it from waste, challenging its classification as a cleaning service. The Tribunal considered this argument in light of precedents and the specific definition of cleaning services provided in the Finance Act.

4. Referring to a previous decision, the Tribunal analyzed the definition of "cleaning activity" under Section 65(24b) and its application to the current case. It highlighted the scope of cleaning services involving commercial or industrial buildings, machinery, and related premises, which did not encompass the activities performed by the Respondent.

In conclusion, the Tribunal upheld the Order-in-Appeal favoring the Respondent, dismissing the Revenue's appeal. The judgment emphasized the specific nature of cleaning services under the Finance Act and clarified that the removal of fly ash for commercial use did not constitute a taxable cleaning activity.