2010 (5) TMI 369 - AT - Service Tax

Waiver of pre deposit - applicants are providing cleaning service - penalties were imposed - applicants were only removing mechanical means fly ash from the ash pond to other area - Held that - applicants are only removing fly ash from the ash pond to the other area, therefore prima facie we find that it is not covering under the cleaning service therefore pre deposit of service tax and penalties are waived and recovery of the same is stayed during pendency of the appeal - Stay petition is allowed

Summary

Issues:
Interpretation of "cleaning service" under the Finance Act for Service Tax liability.

Analysis:
The case involved a demand of Service Tax amounting to Rs. 76,53,349 on the grounds that the applicants were providing a cleaning service by removing fly ash from an ash pond to another area. The Revenue argued that this activity fell under the definition of cleaning service as per the Finance Act. However, the Tribunal analyzed the provisions of the Act and concluded that the removal of fly ash did not qualify as a cleaning service under the specified categories. The Tribunal noted that cleaning service under the Act includes specialized cleaning services for commercial or industrial buildings, factories, plants, machinery, tanks, or reservoirs, excluding services related to agriculture, horticulture, animal husbandry, or dairying. Since the applicants were only transferring fly ash, the Tribunal held that it did not fall within the ambit of cleaning service as defined in the Act.

The Tribunal considered the admitted facts of the case from the adjudication order and the order in appeal, which confirmed that the applicants were solely involved in moving fly ash mechanically. Based on this examination, the Tribunal found that the activity of transferring fly ash did not meet the criteria for a cleaning service as defined under the Finance Act. Consequently, the Tribunal ruled in favor of the appellants by waiving the pre-deposit of the service tax and penalties. Additionally, the Tribunal granted a stay on the recovery of the same during the pendency of the appeal. The decision to allow the stay petition was made after a thorough assessment of the nature of the service provided by the applicants and its alignment with the legal definition of cleaning service under the Finance Act.

In conclusion, the Appellate Tribunal, Kolkata, in this judgment, clarified the interpretation of "cleaning service" under the Finance Act concerning Service Tax liability. By analyzing the specific provisions of the Act and the nature of the activity performed by the appellants, the Tribunal determined that the removal of fly ash did not constitute a cleaning service as defined in the legislation. Consequently, the Tribunal granted relief to the appellants by waiving the pre-deposit of service tax and penalties, along with staying the recovery process during the appeal proceedings.