2009 (6) TMI 465 - AT - Service Tax

Management, maintenance or repair services- The assessee company was awarded a contract by C Ltd. for annual maintenance of green belt in the garden. The scope of contract was restricted horticulture and landscaping, covering growing of grass, plants, trees, or fruits, vegetables, regular moving of lawns, procuring and trimming of shrubs and clearing of garden. Revenue confirms the demand under maintenance or repair services . Commissioner(Appeals) set-aside the order of original authority by holding that the assessee have not done any civil/electrical or mechanical work in relation to maintenance of park and green belt. Board s Circular dated 27.07.2005 refers to maintenance of civil/electrical and construction work of park and green belt and not maintenance of grass, plants, trees or shrubs. Held that- there is no interfere with the order of Commissioner (Appeals), appeal filed by revenue is rejected.

Summary

The Appellate Tribunal CESTAT, New Delhi, consisting of P.K. Das and M. Veeraiyan, members, heard an appeal filed by the Revenue against an order by the Commissioner (Appeals) that activities related to the maintenance of green belt and garden are not subject to service tax under the Finance Act, 1994. The dispute centered around whether the maintenance activities performed by the respondents fell within the definition of "maintenance of immovable property" as per section 65(64) of the Act. The Revenue argued that the activities carried out by the respondents were taxable services as per a Board's Circular and the amended definition of "maintenance and repair" from 16-6-2005. The respondents contended that their activities focused on horticulture and landscaping, which did not constitute maintenance of immovable property. The Tribunal examined the scope of work outlined in the contract and found that the respondents were primarily engaged in horticulture activities such as growing plants, trees, and grass, which were not considered maintenance of immovable property. The Commissioner (Appeals) had correctly ruled that no tax was due on such activities during the relevant period. Consequently, the Tribunal rejected the Revenue's appeal and upheld the Commissioner's order.