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IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST BLOCK NO.

2, R K PURAM, NEW DELHI COURT NO. III Service Tax Appeal No. ST/421 of 2007 Arising out of the Order-in-Appeal No. 101(GRM)ST/JPR-I/2007 Dated : 10/15.5.2007 Passed by the Commissioner (Appeals-1), Customs & Central Excise, Jaipur Date of Decision : 25.6.2009 COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I Vs M/s ANS CONSTRUCTIONS LTD Appellant Rep by: Shri S R Meena, SDR Respondent Rep by: Shri Sameer Jain, Adv. CORAM : M Veeraiyan, Member (T) P K Das, Member (J) Service Tax - maintenance of green belt - not "maintenance of immovable property" - The respondents were engaged for activities of growing of grass, plants, trees or fruits, vegetable, regular mowing of lawns, pruning& trimming of shrubs and cleaning of garden, would not come within the ambit of "maintenance of immovable property". FINAL ORDER NO. ST/253/2009 Per : P K Das: Revenue filed this appeal against Order of the Commissioner (Appeals) whereby adjudication order was set aside and it has been held that the activities pertaining to maintenance of green belt and maintenance of grass, plants, fruits, trees & shrubs, etc. are not subject to service tax under Finance Act, 1994. According to Revenue, the activities of maintenance of garden carried out by the Respondents would fall within the scope of "maintenance of immovable property" such as the "parks and the like" and service tax would be levied w.e.f. 16.6.2005 under Section 65(64) of Finance Act, 1994. 2. The relevant facts of the case as per records, in brief, are that the respondents entered into a contract with M/s. Chambal Fertilizers & Chemicals Ltd. (in short "CFCL") for annual maintenance contract of green belt maintenance in CFCL garden. The scope of contract is "Horticulture and Landscaping". A show cause dated 8.5.2006 was issued proposing demand of tax of Rs. 21,72,670/- for the period 16.6.2005 to 28.2.2006 under the category of "Maintenance or Repair service". It was also proposed to impose penalty along with interest. Original authority confirmed the demand of tax and imposed penalties alongwith interest. The Commissioner (Appeals) set aside the adjudication order. Hence, Revenue filed this appeal. 3. Learned SDR on behalf of the Revenue submits that the contract is consisting of horticulture and landscaping including maintenance and construction service. He further submits that as per clause (64) of Section 65 of Finance Act, 1994 as amended on 16.6.2005 service of "Maintenance and Repairs" means, any service provided by in

relation to maintenance or management of immovable property. He submits that as per Board's Circular No. B-I/6/2005-TRU dated 26th July, 2005 the activities carried out by the respondents are taxable service. He also submits that maintenance of plant, grass and other fixtures like lights and walkway in the park and garden would come under the scope of maintenance of immovable property w.e.f. 16.6.2005. He submits that Adjudication Order may be restored and impugned order be set aside. 4. Learned Advocate on behalf of the respondents reiterates the findings of the Commissioner (Appeals). He submits that it is revealed from the contract that the appellants merely undertook horticulture and landscaping activity, which is not maintenance of immovable property. He also submits that the respondents paid the tax for the construction and cleaning of underground/ above ground water channels and repair and maintenance of civil, mechanical and electrical fittings/fixtures in the green belt. He also submits that the definition of "cleaning activity" under Section 65 (24b) of the Act excluded service in relation to agriculture, horticulture. It is contented that the definition of "immovable property" under section 3 of the Transfer of Property Act excluded standing timber, growing crops or grass. 5. After hearing both sides and on perusal of the records, we find that the dispute relates to as to whether the activities undertaken by the respondents for maintenance of green belt would come within the purview of "maintenance of immovable property" under Section 65(64) of the Act. For the purpose of proper appreciation, the relevant portion of the definition of "Maintenance or Repair service" w.e.f 16.6.2005 is given below:"(64) "maintenance and repair" means any service provided by (i) any person under a contract or agreement; or (ii) a manufacturer or any person authorized by him, in relation to, (a) maintenance or repair including recondition or restoration, or servicing of any goods or equipment, excluding motor vehicle; or (b) maintenance or management of immovable property." It is noted that with effect from 1.5.2006, the above definition was amended to the extent "management, maintenance or repair" of all properties (whether immovable or not) is included. 6. On perusal of Work Order dated 30.6.2003, we find that the respondents entered into "Annual maintenance contract of Green Belt Maintenance in CFCL Garden". The scope of work would be briefly, as under :"GREEN BELT MAINTENANCE IN CFCL 1. HORTICULTURE AND LANDSCAPING. a) Regular mowing of Lawns, cutting of grass in the landscaping areas of Green Belt. b) Pruning & Trimming of Shrubs, Ground Covers and Trees, c) Periodical cleaning, removing and disposal of unwanted vegetation, d) Regular irrigation of the plantation in entire Green Belt.

e) Regular repair, maintenance & cleaning of underground/above ground. f) Replacement of dead plants (under free mortality replacement) g) Providing & arranging application of manure & fertilizers, sand (black & yellow) and seeds. h) Providing & spraying insecticides, pesticides & herbicides. i) Maintaining Nursery in the green Belt. j) Decoration of Stage Flower Pots/ Seasonal Plants/ Cut Flowers including during functions. Cut flowers shall be arranged by you at your own cost. k) Exhibiting Flower pots/ seasonal plants/ cut flowers l) Providing saplings of vegetable/ flowers, bulbs for various green belt activities; m) Maintenance of Natural Forest and Holding area including plantation activities. n) Maintenance of Garden at Transit House; o) Plantation and Irrigation of Elephant Grass; q) Modification/ alternations in the Green Belt; r) Periodical cleaning of Fountains, Cascade & Water Boat. s) Operation, repair & maintenance of Irrigation network, pumps, tube wells, electrical fixtures & electric motors; t) Repair & maintenance of Civil, Mechanical and Electrical Fittings/ Fixtures in the Green Belt. u) Security & Safety of Electrical Fittings (Including MCB, ELCB and DB's etc.) and irrigation network; y) You have to ensure security & safety of the employee; z) Number of supervisor and gardeners for horticulture job should be constant. It appears from CFCL Project Report placed by the learned Advocate that carefully designed green belts that have been developed in and around the fertilizer aesthetic look of the area, Chambal has taken up extensive tree plantation to develop complex. Over 0.2 million trees and shrubs cover an area of 438 acres, with species of birds including migratory one that can be spotted within the Complex. 7. It is seen that the respondents are cultivating as well as landscaping the CFCL garden and the works of repair and maintenance of civil, mechanical and electrical are incidental thereto. It is contended by the learned Advocate that respondent paid tax in such incidental works. The main contention of the respondents is that the activity of horticulture which deals with growing of grass, flowering and plant are not act of maintenance of immovable property. The original authority observed that maintenance of plant, grass, walkways and other fixtures is only maintenance of park and garden,

would come under the maintenance of immovable property. The Commissioner (Appeals) observed that the respondents have not done any civil/electrical or mechanical work in relation to maintenance of park or green belt. Board's Circular dated 27.7.2005 refers to maintenance of civil/electrical and construction work of park and green belt and not maintenance of grass, plants, trees or shrubs. There is no dispute that the respondents paid the tax on construction work in park. It is seen that services in relation to agriculture, horticulture, animal husbandry or diary were excluded from the definition of "cleaning activity" under Section 65 (24b) of the Act. So, the horticulture activity is outside of "cleaning activity" a separate activity. As per Section 3 of Transfer of Property Act, 1982 "immovable property" does not include the standing timber, growing crops or grass. It is noticed that by amendment of Section 65(64) with effect from 1.5.2006, service tax is leviable on maintenance of all properties (whether immovable or not). The respondents were engaged for activities of growing of grass, plants, trees or fruits, vegetable, regular mowing of lawns, pruning & trimming of shrubs and cleaning of garden, would not come within the ambit of "maintenance of immovable property". We have noted that respondent paid tax on construction of walkways and other incidental work in the garden. Therefore, the Commissioner (Appeals) rightly held that no tax is liable on such activity during the relevant period. 8. In view of the above discussion, we find that there is no reason to interfere with the order of the Commissioner (Appeals). Accordingly, appeal filed by the Revenue is rejected. (Pronounced in the Open Court on 25.6.2009)

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