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' accommodation was not subject to Service Tax under the Finance Act, 1994. The demand amount confirmed by the Commissioner was revised to Rs. 16,02,895/- from Rs. 27,98,252/- as per the appellant's claim, and penalties were waived.

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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.

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