2023 (7) TMI 766 - AT - Service Tax

Classification of services - cleaning services or GTA Services - appellant entered into an agreement with M/s CESC Ltd to evacuate fly ash from silos and hydro bins of various thermal power stations of M/s CESC Ltd. - period 16.06.2005 to 04.01.2007 - HELD THAT - A perusal of the definition of cleaning service indicates that the Appellant has not undertaken any of the activities specified therein. It is observed that fly ash is being evacuated and removed as per the contract and the same cannot be termed as a cleaning activity . The evacuation of fly ash is required to continue the industrial activity. Unless the accumulated fly ash is removed from the silos, it cannot be utilized to receive further fly ash emerging during the course of manufacturing. Thus, it is observed that removal of fly ash from the silos is an essential part of the production process. 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 it was 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. Thus, the activities undertaken by the Appellant are not chargeable to service tax under the category of Cleaning Service - appeal allowed.

Summary

Issues:
The issue involves the classification of services provided by the Appellant to M/s CESC Ltd as either 'Cleaning Services' liable to service tax or as GTA services where the tax liability is on the service recipient.

Summary:
The Appellant, registered under the category of GTA services, entered into an agreement with M/s CESC Ltd for evacuating fly ash from silos and hydro bins. The Department contended that this activity falls under 'Cleaning Services' as per Section 65(24b) of the Finance Act, 1994. A Notice demanding service tax was issued, leading to a confirmed demand by the Additional Commissioner. The Commissioner's Revision Order upheld the demand, leading to the Appellant's appeal.

In the Revision Order, the Department argued that the cleaning/evacuation of tank/reservoir falls under the definition of 'Cleaning Activity' as per the Finance Act. The Appellant argued that the fly ash removed has commercial utility and is not dirt, hence not constituting 'cleaning'.

After hearing both sides, the Tribunal observed that the Appellant's activity of evacuating fly ash does not align with the definition of 'Cleaning Activity' as per the Finance Act. The Tribunal referenced a previous decision and highlighted that fly ash, being saleable and having commercial utility, does not constitute waste. Thus, the Tribunal held that the activities undertaken by the Appellant are not chargeable to service tax under the category of 'Cleaning Service'.

In conclusion, the Tribunal ruled that the Appellant's activities do not fall under the category of 'cleaning service' as defined in the Finance Act, setting aside the impugned order and allowing the appeal filed by the Appellant with consequential relief, if any.