Case Law Details
Commissioner of Central Excise & ST Vs M J Solanki (CESTAT Ahmedabad)
CESTAT Ahmedabad held that service of supply the manpower services provided to educational institutions is exempt from payment of service tax vide Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012.
Facts- M/s M.J. Solanki (Partnership Firm) is engaged in providing taxable services such as Cleaning Services and Manpower Recruitment or Supply Agency Services etc. Information received by the DGGI indicated that respondents have provided the taxable services but had not paid the appropriate amount of Service tax on taxable services provided by them. Acting on the intelligence, an inquiry was initiated against the respondent. Accordingly, a search was carried out at their registered office and documents/ records relevant to the inquiry available at the said premises were withdrawn under Panchnama.
Investigation of such documents withdrawn and subsequently details provided by the assessee viz, agreement/contracts/works orders/ invoices/ ledger and statement of Shri Anil Solanki, partner revealed that the Respondent is engaged in providing the services of Manpower Supply, cleaning and House-keeping, Security, Rent-a-cab etc, to their various clients which includes hospitals, medical colleges, educational institutes, local authorities viz. Collector offices, municipal corporations, public health centres, block health centres etc; banks, public sector undertakings, educational institutions, re-search institutions, western railways, districts courts; etc.
Assessee has claimed exemption against major chunk of services them. However, department is of the view that services provided by the respondent are taxable and they are liable to pay Service tax on the income earned from providing said services.
Commissioner has partially dropped the service tax demand proposed in vide the show cause notices. Being aggrieved, the present appeal is filed by the Department.
Conclusion-Held that all the Services provided to education institution such as transport services, hostels, housekeeping, security, canteen services and any other type of services provided to education institution are exempted from payment of service tax and covered under the above entry of exemption notification. In the disputed matter it is on record that respondent supply the manpower to educational institutions by way of drivers/ administrative staff/ class 3& 4 staff that are essential for the educational institutions for performing their works. Therefore in our view respondent is eligible for exemption from payment of Service Tax for supply of manpower to above mentioned educational institutions under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012.
We have also gone through the sample work contract No. GFSU/Housekeeping/9/1/2016 dated 01.01.2016 wherein the scope of works includes cleaning toilets, wash basins, urinals, overhead water tanks, clearing drainages, sewers, manholes, pest control etc. We find that the respondent are eligible for exemp-tion under Sr. No. 25(a) of the Mega Notification No. 25/2012-ST dated 20.06.2012. for cleaning and Housekeeping service provided to Government Hospitals and other government entities.
FULL TEXT OF THE CESTAT AHMEDABAD OR-DER
The present appeals have been filed by the Revenue being aggrieved with the Order-in-Original No. BVR-EXCUS-000-COMM-01 to 02 – 2020-21 dated 21.04.2020 passed by the Learned Commissioner, Central GST, Bhavnagar, whereby the demand of service tax of Rs. 16,45,45,947/- for the period April 2012 to March 2016 as proposed in the Show Cause Notice dated 10.04.2018 and demand of Service tax of Rs. 11,22,96,800/- for the period April 2016 to June 2017 as proposed in the show cause notice dated 02.04.2019 have been dropped. Since both the appeals are arising out of the above adjudication order dated 21-04-2020, the same are taken up for disposal by this common order.
2. The facts of the case in brief are that M/s M.J. Solanki (Partnership Firm) is engaged in providing taxable services such as Cleaning Services and Manpower Recruitment or Supply Agency Services etc. Information received by the DGGI indicated that respondent have provided the taxable services but had not paid the appropriate amount of Service tax on taxable services provided by them. Acting on the intelligence, an inquiry was initiated against the respondent. Accordingly, a search was carried out at their registered office and documents/ records relevant to the inquiry available at the said premises were withdrawn under Panchnama. Statement of Shri Anil J Solanki, partner was recorded. Investigation of such documents withdrawn and subsequently de-tails provided by the assessee viz, agreement/contracts/works orders/ invoices/ ledger and statement of Shri Anil Solanki, partner revealed that the Respondent are engaged in providing the services of Manpower Supply, cleaning and Housekeeping, Security, Rent-a-cab etc, to their various clients which includes hospitals, medical colleges, educational institutes, local authorities viz. Collector office, municipal corporations, public health centers, block health centers etc; banks, public sector undertakings, educational institutions, research institutions, western railways, districts courts; etc.
3. From further scrutiny of the their financial records, it is noticed by the investigating agency that though the assessee had discharged service tax liability under some of the services provided by them, they had claimed a major chunk of services provided by them as exempted from Service tax. However department is of the view that services provided by the respondent are taxable and they are liable to pay Service tax on the income earned from providing said services. Accordingly show cause notices dated 10.09.2014 and dated 02.04.2019 were issued where-in demand of Service tax with interest raised under Section 73 in respect of the taxable services pro-vided by the respondent. Both the show cause notices were decided by the adjudication authority under impugned order, wherein the Ld. Commissioner has partially dropped the service tax demand proposed in the both show cause notices. Hence the present appeals by the Department.
4. Shri Mihir G Rayka, learned Addl. Commissioner (AR) appeared for the Revenue reiterated the grounds of appeals and submits that the assessee had provided man-power on outsourcing basis to Hospital, Community Health Centers etc. and claimed exemption from payment of Service tax under Sr. No. 25(a) of the Notification No. 25/2012-ST dated 20.06.2012. as amended. As per the agreement with these service recipients i.e. Hospital, Community/ Public Health Centres etc. the respondent has supplied Paramedics and other Class 4 category manpower to these Hospitals, health centers etc. The respondent has provided manpower on out-sourcing basis also to some educational institutions by claiming exemption from payment of Service tax under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012.. Adjudicating authority has not appreciated the fact that to get qualified for availing the exemption provided under Sr. No. 25(a) of Notification No. 25/2012, all condition specified therein must be fulfilled. First condition is that the services should be provided to Government, a Local authority or a Governmental authority. Adjudicating authority has not examined and not discussed about the primary condition as to whether the organizations/institution are coming under the purview of „Government‟, „Local Authority‟ , or „ Government Authority‟.
4.1 He also submits that adjudicating authority has examined the aspect of the nature of the services provided by the assessee to the service recipients, but has wrongly concluded that by way of supply of manpower services, the assessee are providing health services under the supervision of authorized medical officers of government run municipal hospitals and government health centers and hence eligible for exemption under Sr. No. 25(a) of Notification No. 25/2012-ST upto 11.07.2014; that the supply of manpower services provided by the assessee to the government run public health institutions is nothing but Public health to the Government which is exempted in terms of Notification No. 25/2012-ST as amended vide Notification No. 6/2014-ST dated 11.07.2014. The nature of activity of assessee i.e. Supply of manpower to various institutions, as per the agreement made between the service recipients, is squarely falls under the category of „Manpower Recruitment of Supply Agency”. Adjudicating authority has erred in holding that the assessee is providing health services.
4.2 He also submits that exemption from payment of Service tax under Sr. No. 25(a) of Notification No. 25/2012-ST dated 20.06.2012. is available when services is provided to Government, a local authority or a government authority, and the said services are provided by way of „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. Municipality has been entrusted to work for public health and sanitation conservancy for the common people. Such functions cover activity of Municipality like spraying of DDT, acting during epidemics, distribution of polio drops to children. All such works are carried out by Municipality for common cause for public health. The Service provider (assessee) has provided manpower Supply agency services by way of providing Para medical staff and administrative staff to service recipients which are government Hospitals/ medical colleges etc. which have their own legal status. The service provider (assessee) never undertakes any responsibility of providing health related services to such hospitals or colleges etc. The manpower so supplied by the assessee i.e. service provider works un-der control and superintendence of respective hospitals. Therefore , the assessee has provided „Manpower Supply Agency Services‟ only which do not have any responsibility of their own to provide services in relation to public health. Further municipality has not assigned any works relating to public health to the assessee. Supply of Para medical and administrative staff to any hos-pital as manpower supply agency service cannot be considered as supply of service by way of “Public Health”. The service provider i.e. the assessee is therefore not entitled for any exemption under Sl. No. 25(a) of Notification No. 25/2012-ST as amended.
4.3 He also submits that adjudicating authority has further allowed the exemption from payment of Service tax on the income arisen from the supply of 3 & 4 staff/ drivers to Dr. Baba Sahib Ambedkar Open University, Ahmedabad and Paramedical staff supplied to training school, industrial training institutes etc. under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012., as amended. However as per the said provisions of the Notification supra, upto 11.07.2014 the assessee is eligible for exemption only if they provide auxiliary educational services. It is beyond doubt that, as per the definition given for „Auxiliary Education Services, in the said notification, supply of manpower in the form of class 3 & 4 staff/driver to the said educational institution cannot be treated as „auxiliary educational services. From 11.07.2014, to get exemption under the said Notification, they must have provided the services as mentioned at Sr. No. 9(b) of Notification supra. The assessee never undertakes responsibility of providing any of the said specified services to the said institution. No justification is given in the or-der-in-original that services of supply of paramedical staff come under the purview of auxiliary education services, as defined in the said Notification, till 11.07.2014 and thereafter, the same come under any of the services mentioned under Sr. No. 9(b) of said Notification. In these circumstances, the conclusion of the adjudicating authority that the assessee is eligible for exemption from Service Tax on the manpower supply service provided to the said educational institution is not correct and not sustainable.
4.4 He further submits that adjudicating authority has allowed the ex-emption from service tax claimed by the assessee for providing Cleaning & Housekeeping services to various organizations under Sr. No. 25(a) of Notification No. 25/2012-ST dated 20.06.2012 as amended. Adjudicating authority in this area also repeated the mistake of non verifying the fact that the first condition of the Notification i.e. whether the service is provided to Government, a local authority or a government authority or otherwise. The nature of activity of the assessee i.e. cleaning of the premises of various institutions squarely falls under the category of “cleaning service”. Adjudicating authority has erred in holding that Cleaning service provided to Government Hospitals and other government entities forms an essential part of sanitation conservancy and waste management and without all the aforementioned services public health cannot be achieved. On perusal of the Sr. No. 25 of Notification 25/2012-ST dated 20.06.2012 as amended, it would be seen that the above said exemption is available only when services are provided to Government, a local authority or a government authority, if the said services is given by way of „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 upto 10.07.2014 and with effect from 11.07.2014 services by “way of water supply, public health, sanitation conservancy, solid waste management of slum improvement and up-graduation”. All such works are carried out by Municipal-ity in public common spaces. Municipality acts to provide facilities and services for the safe disposal of human urine and solid waste, maintenance of hygienic conditions, through services such as garbage collection and waste water disposal etc. The Municipality does not clean the premises of individual hospitals, government undertakings, educational institutions etc., Works of Cleaning/ House-keeping of hospital, government undertaking, educational institutions etc. Work of cleaning /Housekeeping of hospital, government undertaking, educational institutions premises cannot be treated as work done for ‘Public Health” and /or for „Sanitation Conservancy‟. The assessee is therefore not entitled for any exemption under Sr. No. 25 of Notification No. 25/2012-ST as amended. The activity of cleaning of the premises of institutions by the assessee cannot be termed as “Sanitation conservancy”. Adjudicating authority has ignored all these facts and wrongly held that as per Sr. No. 25(a) of the Notification No. 25/2012-ST dated 20.06.2012, as amended, service tax demand for the assessee for providing Cleaning and Housekeeping services to Government undertakings, Government Hospitals, educational institutions, Community Health Centres is liable to be dropped.
4.5 He argued that without appreciating complete facts and without verifying facts/details as required under Notification No. 25/2012-ST (Sr. No. 25(a)), as amended, adjudicating authority has made a wrong conclusion.
4.6 He also submits that the adjudicating authority has also extended the benefit of exemption from Service tax for waste management provided to Rajkot Municipal Corporation without any discussion. It is not specified in the impugned order about the entry in Notification No. 25/2012-ST which provides exemption to such service and conditions of the Notification.
4.7 He also argued that demand of Service tax of Rs. 50,02,195/- is dropped by merely relying the upon a CA certificate, which is not proper.
4.8 He also submits that the assessee had failed to declare the collection of amounts for providing taxable services in the ST-3 returns filed by them. Consequently, this amount to misdeclaration and willful suppression of facts with the deliberate intent to evade payment of Service tax. The nonpayment of service tax on the amounts so collected by assessee which appeared to be consideration for providing taxable services viz. Supply of Manpower or cleaning services to various Community Health Centres etc. came to the knowledge of the DGGI only due to specific investigation carried out. Therefore, the extended period of limitation as envisaged under proviso to Section 73(1) of the erstwhile Finance Act 1994 is rightly invocable in respect of demand of Service tax for the period April,2012 to March,2016. The findings of the adjudicating authority that extended period of limitation is not invocable in this case is not proper and legal.
5. Shri Vikas Mehta, the learned Consultant for the respondent sub-mitted that the reasoning followed by the Commissioner is proper and correct.
5.1 He submits that the appeals filed by the department are beyond the scope of show cause notices inasmuch as it is nowhere alleged in the show cause notice that the service recipients, i.e. government hospitals, medical colleges, primary health centres, community health centres, etc. cannot be treated as Government, a local authority or a Government authority. The fact that the service recipients were all government run bodies and were engaged in the public service is nowhere disputed or questioned in the show cause notices. It is settled law that a new case cannot be made out in appeal proceedings and the lower authority cannot be directed to go beyond the scope of show cause notice. He placed reliance on following decisions:-
(i) Krishan Petrochemicals – 2024(304) ELT 744 (Tri. Ahmd.)
(ii) Amar Coach Builders – 2005(191) ELT 621 (Tri. Del.)
(iii) A. P. Industrial Components – 2002 (148) ELT 246(Tri. Chennai.)
5.2 He further submits that it is duly admitted by the department that paramedics supplied by respondents were trained health care professional who worked in Government Hospitals and public health centres under supervision of medical superintendent and Medical Officers. The service involved in supply of paramedics and other supporting staff to government hospitals, public health centres, etc, has satisfied both the requirement of Sl. No. 25(a) of Notification No. 25/2012-ST dated 20.06.2012. i.e. the service must be provided to Government, a local authority or a governmental authority and the service must be any activity in relation to public health.
5.3 He further submits that the requirement of Sl. No. 25(a) of Notification No. 25/2012-ST dated 20.06.2012, as amended, is provision of Service to Government, etc. and not by Government, etc., the requirement of contract between the Respondent and patients, invoicing by the Respondent to patients, etc. that is propounded by department in appeals filed by department is beyond the scope of aforesaid Notifications.
5.4 He also submits that it is canvassed in appeals that output service is provided by government by using input service provided by respondent. Hence, exemption meant for main service cannot be per se extended to the input service. However, the appeals ignore the fact that what is exempted is the service provided to Government, etc., and not by Government. In this case, the services provided by the Respondent, by itself, is an output service. Consequently, Section 66F(1) of Finance Act, 1994 is not applicable.
5.5 He also argued that inasmuch as there is no challenge to the basic facts that the service recipients are all government institutions/ bodies/ centre etc. and there is also no dispute over the fact that the paramedics and other personnel provided by respondent to these entities engaged themselves in providing public health service through the former, the appeals filed by department proposing to deny the exemption under Sl. No. 25(a) of Notification No. 25/2012-ST dated 20.06.2012., is not tenable on merit.
5.6 He further submits that supply of Class 3 & 4 staff/ drivers to Dr. Baba Saheb Ambedkar Open University, Ahmedabad is eligible for exemption under Sl. No. 9(a) of Notification No. 25/2012-ST dated 20.06.2012., as amended, read with Circular No. 172/7/2013-ST dated 19.09.2013. The revenue ignored the basic fact that without drivers, security guards, administrative staff etc., transportation, security, cleaning and housekeeping cannot be carried out in educational institutions including Dr. Baba Saheb Ambedkar Open University. Hence, the service pro-vided by Respondent is squarely covered by Sl. No. 9(a)of Notification No. 25/2012-ST dated 20.06.2012., as substituted by Sl. No. 9(b)(i) & (iii) of Notification No. 6/2014 –ST dated 11.07.2014.
5.7 He also submits that the cleaning and house-keeping services pro-vided by Respondent to government offices, court, educational institutions, etc, are essential and integral part of public sanitation and solid waste management for achieving the goal of public health. Hence, these services are exempted under Sl. No. 25 of Notification No. 25/2012-ST dated 12.06.2012 as amended by Notification No. 6/2014-ST dated 11.07.2014
5.8 He placed reliance on the sample work order No. Au-tas/Talaja/Store/2015/498 dated 25.08.2015 issued by the Principal, Industrial Training Centre, Takaja and corresponding bill No. 7/2015 dated 01.04.2016 and submits that respondent was awarded the work of cleaning and House-keeping Services and not manpower. Hence the contention of department that the respondent provided Manpower Supply Services (and not Cleaning/House-keeping Service) to educational institution is liable to be rejected.
5.9 As regard to „Solid Waste Management‟ service pro-vided by respondent to Rajkot Municipal Corporation, he submits that exemption was already granted at the stage of show cause notice by the department. Hence, the appeal filed in this regard is contrary to material facts available on record. The same is therefore infructuous and hence, it is liable to be rejected summarily.
5.10 He also submits that the appeal does not rely upon any specific data or evidence to rebut the CA certificate dated 09.07.2019 based on which Ld. Adjudicating Authority has given detail findings in impugned order to drop the demand of Service tax amounting to Rs. 50,02,195/-
5.11 He further submits that the issue involved in this case is about interpretation of statute in general and Notification No. 25/2012-ST dated 20.05.2012, as amend-ed, in particular. The respondent had a bona fide that they are eligible for the exemption owing to the fact that service provided by them were in relation to public health and sanitation conservancy. The belief of Respondent has been duly upheld by the Ld. Adjudicating authority. Extended period of limitation is also not invocable where the issue involves interpretation, there is a bona fide belief of assessee regarding exemption to the services provided by him and all the transactions are duly rec-orded in the books of accounts. He placed reliance on following judgments.
(i) Sujana Metal Products Ltd. -2011(273) ELT 112(Tri. Bang.)
(ii) Anjuman Islahul Muslimin -2019(27) GSTL 685 (Tri. All.)
(iii) Patel Labour Contractor Pvt. Ltd.- 2021 (4) TMI 811-CESTAT-Ahmedabad.
(iv) Asian School of Media Studies- 2023 (68) GSTL 161(T)
(v) Elegant Developers- 2019(29)GSTL 277(T)
(vi) g. T. Cargo Fitting India Pvt. Ltd. 2019(370)ELT 1181(T)
(vii) Intermark Shipping Agencies Pvt. Ltd. 2023(8)TMI 123-CESTAT-Ahmedabad.
6 We have carefully considered the submissions made by both the sides and perused the records.
6.1 As regard the Service tax demand of Rs. 50,02,195/- dropped by the Ld. Commissioner in impugned order we find that in respect of said demand it has been alleged in „Annexure –A‟ to the show cause notice dated 10.04.2018 that a comparison be-tween Service tax payable as per the Sales details submitted by the respondent on 28.12.2017 and Service tax payable and paid as per the ST-3 return filed by the respondent revealed short payment of Service tax amounting to Rs. 50,62,799/- during the period 2012-13 to 2015-16. We observed that the Ld. Commissioner after verifying the CA Certificate dated 09.07.2019, ledger of Service tax liability, ST-3 returns and other documents etc., found that the difference of Service tax collected and not paid is of Rs. 60,604/-. Ld. Commissioner has therefore held the demand of Rs. 60,604/- is sustainable and remaining amount of Rs. 52,02,195/- is not sustainable. We find that as regard the said dropped demand revenue in the present appeals nowhere rely upon any details/ documents or any evidence by which it can be concluded that the demand dropped by the Ld. Adjudicating authority is not correct.
6.2 Now we deal with services provided by the respondent to the Government Hospitals, Medical Colleges, Primary Health Centres, Community Health centres, Arogya & Parivar Kendra, Block health Centres, Panchayat Health Centres, Municipal Corporation, District Ayurved Office Bhavnagar etc. As per the revenue the nature of activity of respondent i.e. sup-ply of manpower to above service recipient is squarely fall under the category of „manpower recruitment or supply agency services” and liable to service tax. However, Respondent by inter alia citing Sr. No. 25(a) of Notification No. 25/2012-ST dated 20.06.2012 as amended by Notification No. 6/2014-ST dated 11.07.2014 claimed the service tax exemption on the ground that they have provided services to hospitals, health centres etc. run by government. The paramedic personnel and other staff provided by them to the said hospitals have worked under the Medical Superintendent, Medical Officers etc. of Government Hospitals, Medical Colleges, Primary Health Centres, Community Health Centres etc., who in turn are run by government for providing public health services.
6.3 We find that to come to a conclusion, the entry at Sl. No. 25(a) in Notification No. 25/2012-S.T. needs to be reproduced and the same are reproduced below for ready reference.
25. 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 or slum improvement and upgradation; or
Further Notification No. 6/2014-ST dated 11.07.2014 substituted en-try No. 25 of above mentioned Notification as under :
(viii) in entry 25, for item (a), the following item shall be substituted, namely :-
“(a) water supply, public health, sanitation conservancy, solid waste management or slum improvement and up-gradation; or”;
6.4 On perusal of the above entry of Notification No. 25/2012-ST dated 20.06.2012 as amended vide Notification No. 6/2014-ST dated 11.07.2014, it would be seen that the above said exemption is available to services which are provided to Government, a local authority or a government authority by way of 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 upto 10.07.2014 and w.e.f. 11.07.2014 services ‘ by way of water supply, public health, sanitation conservancy, solid waste management of slum improvement and up-gradation. In the impugned matter revenue nowhere dispute the fact that Government Hospital, Health Centres are engaged in providing services related to public health. The para–medic personnel, etc. provided by the respondent to said Hospitals / Health Centre have worked under the supervision of authorized Medical Practitioner i.e. Medical Superintendent, Medical Officers of the Hospital, health centre etc. Thus the Medical Superintendent, Medical Officers of the Hospital and Health centres who provided service by way of public health to the said government hospital and health centre run by the government in the capacity of government employee and the para-medics, etc, provided by the respondent who worked in the same hospitals/ health centres are their subordinates and carried out their instructions in connection with public health, were all providing the services to government with a common goal of public health. From the above exemption entry it is clear that the intention of the legislature is clear that services of public health is required to be exempted from payment of Service tax. Further the said entry of above Notification supra is for providing public health services ‘to Government‟ and not ‘by Government‟. The words “ any activity” and “by way of“ employed by the legislature in above exemption entry of Notification No. 25/2012-ST would make it abundantly clear that all the activities involved in relation to public health are covered under the said entry. We find the strength in the finding of Ld. Adjudicating authority that any services provided to government in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement etc, is exempted from payment of service tax in terms of above mentioned Notification. We also noticed that the concept of categorization of services under Section 65 of the Finance Act, 1994 has been redundant after 01.07.2012. For the exemption of service tax under the disputed entry only two requirements has to be satisfied. First the service must be provided to Government, Local Authority or a Governmental authority and second is the services must be any activity in relation to public health. In the present disputed matter respondent fulfill both the requirements. Therefore, we do not find any reason for interfering in the conclusion reached by the Ld. Commissioner in the impugned order before us. In our view, impugned order is correct, legal and does not suffer from any infirmity.
6.5 Further we find that the revenue for denying the claim of above exemption also take the ground that the para –medics and other staff provided by the respondent do not have any direct contract with the patients and do not raise any invoices on the patients and also do not have any legal responsibility to provide public health services on his own account. In this context we find that a plain reading of the above provisions of Notification No. 25/2012-ST as amended makes it clear that there is no requirement of a contract between the para-medics, etc. and Patients. There is no requirement that such para-medics and personnel must issue invoices in the name of patients. In such circumstance, it is not permissible to insert such a requirement with a view to deny the exemption. The requirement of the said above exemption entry is only that services must be provided to Government in relation to public health. Once it is the requirements of exemption only, any further condition of contract or invoice between the service provider and patients that is nowhere specified in the above notification cannot be read into it.
6.6 As regard the demand dropped by the Ld. Commissioner on services provided to the Education Institution i.e. Dr. Baba Saheb Ambedkar Open University, Govern-ment Medical College, Government college, Nursing College, University Granth Nirman Board, Sport Authority of Gujarat/ Sport Training Centers, IPR- Institute of Plasma Research, Gandhinagar etc. we find that the Revenue has contended that services provided by the respondent are not covered un-der the auxiliary education services. Supply of manpower in the form of class 3 & 4 staff/ driv-ers to said educational institution cannot be treated as „auxiliary education services‟ from 01.07.2014, to get exemption under Sr. No. 9(b) of Notification No. 25/2012-ST dated 20.06.2012. We find that in the impugned matter there is no dispute on the facts that the service recipients are educational institutions. As per the revenue the activity of respondent is not covered under the Sr. No. 9 of Notification No. 25/2012-ST. The relevant portion of Sr. No. 9 of the Notification No. 25/2012-ST dated 20.06.2012 is reproduced below.
“9. Services provided to or by an educational institution in respect of education exempted from service tax, by way of,-
(a) auxiliary educational services; or
(b) renting of immovable proper-ty;
Further Notification No. 6/2014-ST dated 11.07.2014 substituted en-try No. 25 of above mentioned Notification as under :
(iii) for entry 9, the following entry shall be substituted, namely :-
“9. Services provided, –
(a) by an educational institution to its students, faculty and staff;
(b) to an educational institution, by way of,-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored by the Government;
(iii) security or cleaning or house-keeping services performed in such educational institution;
(iv) services relating to admission to, or conduct of examination by, such institution;”;
6.7 We find that the Serial No. 9 of the Mega Exemption Notification No. 25/2012-S.T., dated 20-6-2012 exempted from service tax services by way of “(a) auxiliary education services to an educational institution”. Further, vide Notification No. 06/2014, dated 11-7-2014, Entry 9 came to be substituted as above. We also find that C.B.E. & C. vide their Circular No. 172/7/2013-S.T., dated 19-9-2013, which has been issued for clarification regarding levy of service tax on certain services relating to the education sector clarify as under :
“2. The matter is covered by two provisions of the Finance Act, 1994. Section 66D of the Finance Act contains a negative list of services and clause (I) thereof reads as under : “services by way of-
(i) pre-school education and education upto higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force;
(iii) education as a part of an approved vocational education course;”.
Further Section 93(1) of the Finance Act, 1994, enables the Government to exempt generally or subject to such conditions taxable service of specified description. By virtue of the said power, Government has issued a Notification No. 25/2012-S.T., dated 20th June, 2012, exempting certain services. Sl. No. 9 thereof reads as follows :
“Services provided to an educational institution in respect of education exempted from service tax, by way of,-
(a) auxiliary educational services; or
(b) renting of immovable proper-ty;”.
As defined in the said notification, “auxiliary educational services” means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge-enhancement activity, whether for the students or the faculty, or any other services which educational institutions ordinarily carry out them-selves but may obtain as outsourced services from any other person, including services relating to admission to such institution, conduct of examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation of students, faculty or staff of such institution.
3. By virtue of the entry in the negative list and by virtue of the portion of the exemption notification, it will be clear that all services relating to education are exempt from service tax. There are many services provided to an educational institu-tion. These have been described as “auxiliary educational services” and they have been defined in the exemption notification. Such services provided to an educational institution are exempt from Service Tax. For example, if a school hires a bus from a transport operator in order to ferry students to and from school, the transport services provided by the transport operator to the school are exempt by virtue of the exemption notification
From the above Notification and Clarification issued by the Board it is clear that all the Services provided to education institution such as transport services, hostels, housekeeping, security, canteen services and any other type of services provided to education insti-tution are exempted from payment of service tax and covered under the above entry of exemption notification. In the disputed matter it is on record that respondent supply the manpower to educa-tional institutions by way of drivers/ administrative staff/ class 3& 4 staff that are essential for the educational institutions for performing their works. Therefore in our view respondent is eligible for exemption from payment of Service Tax for supply of manpower to above mentioned education-al institutions under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012
6.8 As regard the cleaning and housekeeping services provided by the respondent to Government offices, Courts, government undertakings we find that in this regard Ld. Adjudicating rightly conclude that these services are exempted under Sl. No. 25 of Notification No. 25/2012-ST dated 12.06.2012 as amended by Notification No. 6/2014-ST dated 11.07.2014. We find that as per Sr. No. 25(a) of Notification No. 25/2012-ST dated 20.06.2012 as amended vide Notification No. 6/2014-ST dated 11.07.2014, service provided to Government, Local Authority or a Government authority by way of carrying out any activity in relation to public health, sanitation con-servancy, solid waste management etc. are exempted from service tax. We find that in the present matter revenue demanded the service tax from the respondent for providing cleaning services to Government Hospitals, such as GEMRS Gotri General Hospitals, Vadodara, Superintendent General Hospital Kheda, Civil Hospital, Nadiyad, G.G.G. Hospital, Jamnagar, Office of Employee State Insur-ance Corporation situated at various locations etc. We find that the cleaning and housekeeping ser-vices are essential parts of sanitation conservancy and waste management. We have also gone through the sample work contract No. GFSU/Housekeeping/9/1/2016 dated 01.01.2016 wherein the scope of works includes cleaning toilets, wash basins, urinals, overhead water tanks, clearing drainages, sewers, manholes, pest control etc. We find that the respondent are eligible for exemp-tion under Sr. No. 25(a) of the Mega Notification No. 25/2012-ST dated 20.06.2012 for cleaning and Housekeeping service provided to Government Hospitals and other government entities.
6.9 We also find that the Revenue has also challenged the finding of the Ld. Commissioner dropping the demand on ground of limitation. We find that if a tax is chargea-ble, in order to recover the service tax not paid or short paid a notice has to be issued under Section 73 of the Act. This is the only remedy available to the Revenue. The notice can be issued within the normal period of limitation only unless the elements of fraud or collusion or willful statement or suppression of facts or contravention of any provisions of the Act or Rules with an intent to evade payment of service tax is established. If any of these elements are established in any case, the de-mand can be raised within an extended period of limitation of 5 years.
6.10 We are unable to find any proof of intent to evade either from the show cause notice or from the grounds of appeals of revenue in the present matter. The de-partment nowhere allege that respondent had deliberately interpreted the Exemption Notification and its clause in a wrongly manner with intent to evade payment of Service tax. The intention has to be proved to invoke extended period of limitation. In the instant case, we do not see any such willful or deliberate suppression of the fact with intent to evade payment of service tax. We are of the opin-ion that whether the respondent is entitled for the benefit of the exemption notification or not de-pend on the interpretation of the exemption notification and on the contrary, to a very large extent, their interpretation is found correct. Thus, it is evident that there is not even an iota of evidence to even suggest that there was any willful misstatement or suppression of facts on the part of the Re-spondent. Consequently, extended period is not invokable in this case. Therefore we do not see any reason to interfere with the order under appeal.
7. In view of the foregoing discussion and findings, the impugned or-der is upheld. Revenue’s appeals are dismissed.
(Pronounced in the open court on 23.02.2024)
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