2018 (8) TMI 692 - AT - Service Tax

Cleaning services - appellant providing cleaning of coaches services to Indian Railways for a period with effect from 1.4.2011 to 31.3.2011 - Held that - Since the period in dispute is prior to 2012 i.e. prior to incorporation of the concept of negative list when onwards these services have been covered under Section 65(105)(zzzd) and made taxable. Hence, the definition of cleaning service as was existing prior to year 2012, is relevant for the present adjudication. A mere perusal of the definition and interpretation thereof makes it clear that it is not merely an object or premise but the object or premise of commercial or industrial building or premises thereof. No doubt, railways is a commercial concern but it is already been settled that the coaches are rolling stock of railways and hence, they were not covered strictly under the definition in pre-negative list era. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of the definition of "cleaning activity" under Section 65(24b) for services provided to Indian Railways prior to 2012.

Analysis:
The appellant provided cleaning services to Indian Railways from 1.4.2011 to 31.3.2011. The department issued a show cause notice alleging taxability under 'Cleaning services' as per Section 65(105)(zzzd) of the Act. The order-in-original confirmed the demand, which was upheld by the Order-in-Appeal, leading to the appellant filing the present appeal.

The appellant argued that since the period was pre-negative list, cleaning of Railway coaches should not be taxable. They cited the decision in M/s. R K Refreshment and Enterprises P Ltd. case to support their stance. The department, however, relied on the Tribunal's decision in the case of Mukesh Kalway vs. CCE, Bhopal, emphasizing that being a public utility does not automatically exempt from service tax.

The Tribunal analyzed the definition of "cleaning activity" under Section 65(24b) which includes cleaning of commercial or industrial buildings and premises. It noted that while railways are commercial, the coaches are rolling stock and not strictly covered under the definition in the pre-negative list era. Citing the R K Refreshment and Enterprises Pvt. Ltd. case, the Tribunal agreed that coaches do not fall under the definition of commercial or industrial building, thereby setting aside the orders and allowing the appeal.