Services provided by government or local authorities to business entities

13 AHMEDABADIII v. MURLIDHAR HORTICULTURE PVT LTD ST – The respondent-assessee is engaged in maintenance of gardens, which includes work relating to lawn, hedge & shrubs – Such services are exclusively provided to M/s Reliance Industries Ltd at different sites – Duty demands were raised under Management, Maintenance and Repair Services – On adjudication, the demands for the period prior to 01.07.2012 were dropped on grounds that the activity was not classifiable under MMR service – However, the demands for post 01.07.2012 were confirmed on grounds that the service was not covered under the Negative list – On appeal, the Commr.(A) noted that the activity involved maintenance and development of garden, trees, pots and cutting and sampling of plants, trees, grass, water, fertilizer – Hence it was held that such activity was classifiable under Agricultural activities – Hence the Revenue’s appeal.
Held: Considering the definition of Management, Maintenance and Repair Services nowhere leads to the inference that the assessee’s activities fall under this definition – The property involved should be movable or immovable – Section 3 of the Transfer of Property Act 1882 defines immovable property as not including timber, growing crops or grass – Admittedly, the assessee’s activities do not fall under this category and are not classifiable under this heading: CESTAT (Para 5,6)
Held: Agriculture – The same has been defined u/s 65B(3) of the Finance Act 1994 to include the cultivation of plants and rearing of all life forms of animal, except the rearing of horses, for food, fiber, fuel, raw material or other similar products –
Moreover, the Negative List under Section 66D(d) of the Finance Act 1994 exempts services related to production of any agriculture produce including cultivation, harvesting & Threshing plant protection – Hence the cultivation of plants and their protection is included in scope of Agriculture – Moreover, the term ‘Horticulture’ means to provide for plant conservation, landscape restoration, landscape restoration and landscape & garden designing, maintenance – The term ‘agriculture’ has a very wide compass and covers ‘horticulture’ as well, which in turn covers gardening in its scope – In this regard, the Apex Court in Kasturi (Dead) by Lrs Vs. Gaon Sabha (1989) 4 SCC 45 held that in the absence of a statutory definition, the meaning in the common parlance would have to be adopted – Hence the activity undertaken by the assessee falls under the definition of horticulture, which is part of agricultural activity only & is not liable for any service tax – Moreover, as the issue is one of interpretation, the extended period of limitation cannot be invoked to raise duty demand – Besides, the Revenue adduced no evidence to show that there was any deliberate intent to evade payment of duty – Hence the demands are hit by limitation as well: CESTAT (Para 1,5,6,8,9)
Assessee’s appeal allowed: AHMEDABAD CESTAT