By TIOL News Service

KOLKATA, DEC 17, 2016: THIS is a Revenue appeal.

The Respondent was providing Security Agency Services for which they were registered but not in respect of Cleaning services.

Revenue detected the above and also the fact that they had paid service tax at a much lesser value.

The Commissioner(A) in his order dated 12/08/2013 inter alia held that no service tax is payable on cleaning services and had also set aside the penalties imposed u/ss 76 & 78 by invoking section 80 of FA, 1994.

Aggrieved with this largesse, the department is in appeal before the CESTAT.

The respondent submitted that they were under the bonafide belief that 'cleaning services' are not chargeable to tax, as also held by first appellate authority in Para-11 of the OIA dt 12/8/2013. In the matter of the value of the security agency services, it is pleaded that they can provide a Cost Accountant certificate to certify that there has no been no misfeasance.

The Bench observed –

++ It is the case of the Respondent that 'cleaning services' provided to Assam University & Kendriya Vidyalaya Building (KVS) are not taxable services as held by Comm (A) in Para 11 of the OIA dt 12/8/13 and that if value of cleaning services is taken out from the cases mentioned in Annexure-A to the show cause notice dt 20/4/2009, then service tax liability will be much lower. Secondly, providing of cleaning services to Assam University & Kendriya Vidyalayas (KVS) has been held to be non-taxable by the first appellate authority against which Revenue is not in appeal.

++ Further, Respondent has made out a point that many other entries in Annexure-A to the show cause notice dt 20/4/09 also pertain to cleaning services on which no service tax levy is attracted. In view of the above, as the matter pertains to re-quantification of service tax, it is required that appellant should produce a cost accountant's certificate to the Adjudicating authority to demonstrate as to what is the extent of exempted services (cleaning services) allowed by first appellate authority in the list contained in Annexure-A to the show cause notice dt 20/4/2009.

The Appeal filed by the Revenue was allowed by way of remand to the Adjudicating authority. The issue of imposition of penalties alongwith applicability of Sec 80 was kept open.

(See 2016-TIOL-3255-CESTAT-KOL)