TaxTMI 
TaxTMI 
2026 (9) TMI 1597
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....lways, East Central Railways, Western Railways. Services rendered by the Appellant were in the nature of 'Watering of coaches of trains', 'Onboard Housekeeping', 'Manual Removal of Garbage' etc. (Copy of Contract Ref. MC/116/0/OBHS/TKPR/1/14 dated 28.04.2015 made with Eastern Railway enclosed at Page 53 of Paper Book). The Appellant have been registered with the service tax department and have been collecting and depositing service tax, in respect of the cases where the Railways had paid the service tax as per the contracts. In respect of the other cases, the Appellant has not collected and paid the service tax, as they were of the view that the services rendered to Railways are not exigible to service tax. 2.1. On the basis of intelligence gathered by DGGI, an investigation was initiated against the Appellant. A search was conducted by the officers of DGGI at the premises of the Appellant in Patna on 02/03.07.2018 and on 03.07.2018. During the course of search, the Appellant was asked to deposit an amount of Rs. 60 lakhs against their purported service tax liability. 2.2. On completion of the investigation, the Additional Director General, DGGI, issued a Demand cum Notice to....
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....mination point. These services confirm to the definition of 'service' under Section 65B(44) read with Section 65B(51) of the Finance Act, 1994 and hence liable to service tax. (b) The activities done by the Appellant are not covered under the negative list in terms of N.F. No. 25/2012-ST dated 20.06.2012. Further, Divisional Finance Manager, Eastern Railway Malda has paid service tax to the Appellant towards providing cleaning services to the. Hence, the Appellant are liable to pay service tax. 3.1. In this regard, the Appellant submits that they are eligible for the benefit of exemption as provided under the N.F. No. 25/2012-ST dated 20.06.2012 (effective from 01.07.2012). As per clause (a) of Sl. No. 25 of the said Notification, the following services have been exempted from payment of service tax. The said entry states as under:- "Services provided to Government, a local authority or a governmental authority by way of (a) Carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management (b) ....." 3.2. The Appell....
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....) to whom such services were rendered, have been fulfilled by them. No service tax is charged when a municipality renders such services. In this particular case, the same kind of services has been rendered by the appellant and that too to the Indian Railways and therein comes the usefulness or applicability of the Notification No. 25/2012-ST dated 20.06.2012 which has exempted such kind of services which are functions ordinarily entrusted to a municipality. If a municipality would have rendered such services, such Notification would automatically become otiose. Such kind of notification was not in existence prior to 01.07.2012 and has taken effect only from 01.07.2012 for the purpose of exempting such services from service tax when rendered to Government, a local authority or a governmental authority. Accordingly, the Appellant submits that the impugned services having been rendered by the appellant to Government, there is no liability to Service Tax as per Sl. No. 25 of Notification No. 25/2012-S.T. dated 20.06.2012. 3.5. The Appellant submits that this issue is no more res integra, as an identical issue has already been decided/settled in favour of the assessee/appellant th....
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.... of the Finance Act, are not applicable to this payment. Accordingly, the Appellant submits that they are eligible for the refund of the amount deposited during the course of investigation along with applicable interest. 3.8. On the issue of collection of service tax and not depositing the same to the government exchequer the appellant argued that whatever service tax they collected by them they had paid the same to the Government Exchequer and reflected the same in their ST-3 Returns and furthermore the department has not been able to bring on record and any conclusive documentary proof to show that the appellant had retained any portion of the service tax amount collected. 4. The Ld. Authorized Representative of the Revenue submits that the appellant is not eligible for the benefit of exemption as provided under Sl. No. 25 of Notification No. 25/2012-S.T. dated 20.06.2012 in as much as the said Notification exempts services which are ordinarily entrusted to a municipality, but in this case, the services rendered by the appellant were not entrusted to a municipality. He also submits that the services rendered by the appellant were not in a 'public area' and thus the ....
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.... on 01.10.2013 as advised by Indian Railways. Later, they stopped payment of service tax filed 'Nil' returns during the period October 2014 to March 2015. We find that the Department had not raised any objection when the appellant filed the 'nil' Return and claimed eligibility of the exemption provided under Entry No. 25 of Notification No. 25/2012-S.T. dated 20.06.2012. From the extract reproduced in para 8.2. supra, we find that the services provided to the Government which are in the nature of services ordinarily rendered by a municipality such as water supply, public health, sanitation conservancy and solid waste management are, inter alia, are exempted from Service Tax by virtue of the above said Notification. In this case, there is no dispute that the appellant has rendered the services namely, 'upkeep/maintenance of platforms', 'dry sweeping of empty rakes and mechanized yard cleaning', 'railway platform cleaning', 'disposal of accumulated garbage to designated placed', 'onboard housekeeping service in reserved coaches of Poorva Express' and 'cleaning of Sonpur Railway Station platform and its surrounding area' to a Government body viz. the Indian Railways. We find t....
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....garding the other penalties imposed in the impugned order, we find that the Ld. Adjudicating authority has imposed penalty of Rs. 30,000/- in terms of Section 77(1)(b), 77(1)(c) &77(2) and imposed late fees of Rs. 1,21,700/- under Rule 7C of ST Rules, 1994 read with Section 70 of Finance Act,1994. These penalties have been imposed on account of non-filing of returns and delay in filing of returns. As the delay in filing of the returns and non filing of returns for some period are not in dispute, we uphold the above penalties confirmed in the impugned order. 8. We find that during the course of investigation, the Appellant was asked to deposit an amount of Rs. 60 lakhs against their purported service tax liability. In view of the findings supra, the demands of service tax confirmed against the Appellant is not sustained. As the Appellant has made this deposit during the course of investigation, this payment cannot be considered as payment of service tax and the provisions of section 11B, made applicable to service tax matters by section 83 of the Finance Act, are not applicable to this payment. Accordingly, we hold that the Appellant is eligible for the refund of the amount depos....