Transportation and Disposal of Ash falls cannot be Taxed under Cleaning Service: CESTAT quashes Service Tax Demand [Read Order]

The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed service tax demand and ruled that transportation and disposal of ash falls cannot be taxed under Cleaning Service.

Investigation by the Preventive Branch of Central Excise revealed that the appellants, M/s Kumar Builders, have provided services under the category of “Cleaning Activity”, “Maintenance or Repair”, “Management, Maintenance or Repair”, “Construction of Complex” and “Commercial or Industrial Construction” etc. and have not paid applicable service tax. A show cause notice was issued to the appellants and was confirmed by the Adjudicating Authority.

The Counsel for the appellant submitted that it is clear from the work order that the activity undertaken by the appellants is loading of ash in trucks/ Dumpers from the ash pond and transporting/ dumping/ stacking the same in the peripheral area provided by National Fertilizers Limited.

The Counsel further submitted that this activity will not fall under “Cleaning Services” as defined under Section 65(105)(zzzd) and that the very same issue is decided in favour of the appellants by the Tribunal in the case of Calcutta Industrial Supply Corporation and in addition the service rendered cannot be treated as Cleaning Service even as per CBEC Circular No. B1/6/2005-TRU dated 27.07.2005.

In the case of Calcutta Industrial Supply Corporation, it was held that when the appellant was awarded tender for excavation of ash from different fields of ash ponds of DTPS, DVC, Waria for the purpose disposal of ash in the abandoned mines of ECL and for transportation and disposal of ash, in the abandoned mines, the demand of service tax under the category of Cleaning Service is not justified.

A Two Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “A plain reading of the definition gives to understand that the activity covered by the above definition is not transportation as is done by the appellant; understandably, all types of cleaning are not covered by this definition.”

To Read the full text of the Order CLICK HERE

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