Removal of jungle and bushes inside building area prima facie is not liable to Service Tax under category of ‘Site formation and clearance'
THE Union Budget 2005-06 saw imposition of Service Tax on a new service titled - 'Site formation and clearance, excavation, earth moving and demolition services'. The TRU letter F.No.B1/ 6 /2005-TRU, dated July 27, 2005mentions that the definition contained in clause (97a) of section 65 of the Finance Act, 1994 of the aforementioned service is an inclusive definition and the activities specifically mentioned are indicative and not exhaustive.
Be that as it may, the applicant had received a work order and pursuant thereto undertook the activity of removing the 'jungle and bushes' inside the building area for which they received labour charges.
The jurisdictional authorities at CCE, Pune-III were of the opinion that this 'site clearance' activity attracts Service Tax under the above category and hence handed over to the applicant a demand notice of Rs.25,02,270/-. The lower authorities confirmed the demand along with interest and penalty and so the applicant is before the CESTAT with a Stay application.
While the applicant contended that the activity undertaken by them cannot be considered as ‘site formation and clearance', the Revenue representative emphasized on the word "clearance" appearing in the definition of the subject service category.
The Bench observed -
"5. We find that as per the work order the applicants had undertaken the activity of removal of bushes etc. inside the building. Therefore, prima facie, we find that applicant had made out strong case, therefore the pre-deposit of dues are waived and recovery of the same is stayed during the pendency of the appeal. Stay petition is allowed."