2009 (9) TMI 729 - AT - Service Tax

Tribunal rules cleaning services for religious institution exempt from Service Tax

The Tribunal ruled in favor of the appellant, finding that the cleaning activity in buildings maintained by a religious institution for pilgrims' ... Taxable service under Section 65(24b) of the Finance Act, 1994 - cleaning services in non-commercial premises - prima facie case - stay of recovery - waiver of adjudged dues pending appealTaxable service under Section 65(24b) of the Finance Act, 1994 - cleaning services in non-commercial premises - prima facie case - stay of recovery - Whether the cleaning activity carried out by the appellant at buildings maintained by the Tirumala Tirupathi Devasthanam constituted a taxable service under Section 65(24b) of the Finance Act, 1994 and whether recovery should be stayed pending appeal. - HELD THAT: - The Tribunal found, on the materials before it and on the parties' submissions, that the cleaning services in question were performed in buildings maintained to provide accommodation to pilgrims visiting the temples and were not commercial or industrial buildings, factories, plants, machinery, tanks or reservoirs of such commercial or industrial premises. On this basis the impugned activity was prima facie not a taxable service under Section 65(24b) of the Act. Having recorded a prima facie view against the taxability of the activity and that the appellants had made out a prima facie case, the Tribunal exercised its discretionary power to prevent immediate recovery of the adjudged demand and penalties by ordering a complete waiver of the adjudged dues and staying recovery thereof until the appeal is decided.The impugned cleaning activity is prima facie not taxable under Section 65(24b); a complete waiver of the adjudged dues was ordered and recovery stayed pending disposal of the appeal.Final Conclusion: The Tribunal, finding a prima facie case that the cleaning activity was not taxable under Section 65(24b) because it was carried out in pilgrim accommodation (non-commercial premises), ordered complete waiver of the adjudged dues and stayed recovery pending the appeal. Issues:1. Whether the cleaning activity undertaken by the appellant in buildings maintained by a religious institution is subject to Service Tax under Section 65(24b) of the Finance Act, 1994Rs.2. Whether the demand of Rs. 28,54,217/- confirmed by the Commissioner is justified or should be revisedRs.Analysis:Issue 1:The primary issue in this case was whether the cleaning activity undertaken by the appellant in buildings maintained by a religious institution is subject to Service Tax under Section 65(24b) of the Finance Act, 1994. The Commissioner had confirmed a demand of Rs. 28,54,217/- and imposed penalties under various sections of the Act. The appellant argued that the impugned activity does not fall under the taxable service specified under Section 65(24b) of the Act as it was carried out in buildings maintained by the religious institution for pilgrims' accommodation. The Tribunal, after reviewing the records and submissions, found that prima facie, the impugned activity is not a taxable service specified under Section 65(24b) of the Act. Therefore, the Tribunal ordered a complete waiver of the adjudged dues and stayed the recovery pending the appeal's decision.Issue 2:The second issue pertained to the demand amount confirmed by the Commissioner, which the appellant contested as erroneous. The appellant claimed that the tax due was actually Rs. 16,02,895/-, not Rs. 27,98,252/- as confirmed by the Commissioner. The Tribunal considered this discrepancy and, based on the arguments presented, found merit in the appellant's contention. The Tribunal acknowledged the error in the demand amount and ordered a revision to reflect the correct tax due of Rs. 16,02,895/-. This decision was made in conjunction with the determination that the impugned activity was not subject to Service Tax under Section 65(24b) of the Act.In conclusion, the Tribunal ruled in favor of the appellant on both issues, determining that the cleaning activity undertaken in buildings maintained by a religious institution for pilgrims' accommodation was not subject to Service Tax under the Finance Act, 1994. Additionally, the Tribunal revised the demand amount to Rs. 16,02,895/-, recognizing the error in the Commissioner's calculation.