TMI Blog2020 (11) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... e service recipient. Incineration of waste is a process involving destruction of waste/residue at high temperatures, which has been undertaken by the Appellant at its own plant. The waste of other industries which is intended to be incinerated by the Appellant is delivered by the industries to the premises of the Appellant. It is not a case where the Appellant goes to the premises of the industries to perform any cleaning activity. Instead, the waste is delivered to the site of the Appellant in safe leakage proof bags by the industries for proper disposal. The industries are not concerned with the waste thereafter. It is clear that 'exterminating of objects covers destroying insects, rodents and other pests in respect of objects/premises. Hence, the term extermination has to be in connection with activities such as fumigation; pest control or other such activities which are in the form of treatment of premises / objects against animal or pest infestation. The impugned order, therefore, erred in treating the term extermination as being equivalent to incineration - It would be also be pertinent to refer to the CBEC Circular dated July 13, 2007 which specifically prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable under section 65(105) (zzzd) of the Finance Act. 5. Accordingly, a show cause notice dated October 16, 2015 was issued to the Appellant. The Appellant filed a detailed reply to the show cause notice. The Commissioner, by the impugned order dated March 15, 2016, has confirmed the demand with interest and penalty. 6. Shri B.L.Narasimhan learned counsel appearing for the Appellant has made the following submissions: i) The show cause notice was issued to the Appellant on the basis of an audit objection dated November 27, 2013 for the period April 1, 2011 to March 31, 2013 on the amount received by the Appellant towards incineration. As the said audit objection was dropped by the Superintendent, Central Excise by letter dated January 20, 2016, the impugned order confirming the demand of service tax could not have been issued. To support this contention, reliance has been placed on the decisions of the Tribunal in M/s. Kalyan Projects Construction Co. vs. Commissioner of Central Excise and Service Tax, Chandigarh, 2019 (9) TMI 464- CESTAT Chandigarh and Hindustan Zinc Limited vs. Commissioner of Central Goods and Services Tax, Udaipur, 2019 (370) ELT 1582 (Tribunal D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute is confined to the incineration of waste generated by other industries. The Appellant claims that under the agreements, the companies are required to safely package the waste and deliver it to the premises of the Appellant for incineration. 12. The first contention of learned counsel for the Appellant is that since an audit objection for the period April 1, 2011 to March 31, 2013, regarding the issue raised in the show cause notice, was dropped by the Superintendent by a letter dated January 20, 2016, the Commissioner could not have confirmed the demand. It has also been pointed out by learned counsel for the Appellant that an audit objection was at earlier raised on April 8, 2011 for the period March 2009 to December 2010, but this audit objection was subsequently dropped by the Commissioner by letter dated May 16, 2012. Thus, not only was the show cause notice liable to be withdrawn on the dropping of the relevant paragraphs of the audit objections, but the impugned order is also liable to be set aside on this ground. 13. In this connection, it would be relevant to refer to reproduce the communication dated November 27, 2013 sent by the Superintendant, Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under intimation to us. We have also received your letter no. V(H)Adj/CE-27/ALWAR/130/2015/676 dated 27-01-2016 from the Office of Dy.Comm. (Adj.) fixing the personnel hearing in the matter relating to above SCN on 16/17/18 February 2016 at 12.30 Hrs in your kind office, You are requested to kindly confirm as to whether should we present personally on above hearing in the above matter in view of the position as explained above. Howęver, even if required we shall visit your office on any one the above dates for personal hearing as granted to us vide letter dated 27-01-2016. 17. The Commissioner, however, did not accept this plea of the Appellant and the relevant portion of the order is reproduced below; The noticee in their reply has submitted that the SCN covers the audit period from April 2010 to March 2013 for computing the demand of service tax of ₹ 1.21 Crores in which the period from April 2010 to December 2010 is already included by the audit team and the Para has been settled. I find that the internal audit was conducted on 31.01.2011 and 01.02.2011 for the period 2009 to December 2010 and the Section 65(24b) of the Act defining 'Cleaning Activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pped, the demand confirmed in the impugned order has to be set aside. 22. This apart, the Commissioner also committed an error in holding that the activity of incineration of hazardous waste is covered under exterminating of objects, in the definition of cleaning activity . 23. The scope of cleaning activity under Section 65(245) of the Act provides for: i. Cleaning or disinfecting or exterminating or sterilizing of objects of a commercial or industrial building or factory or plant or machinery; ii. Cleaning or disinfecting or exterminating or sterilizing of the premises of a commercial or industrial building or factory or plant or machinery. 24. A reading of the scope of cleaning activity under section 65(24b) of the Finance Act would indicate that the essence of the activity is to clean either an object which is present within the premises or the premises itself of a commercial building/factory/plant or machinery. These services are rendered by the service provider at the premises of the recipient, where the intended objects or premises are required to be sanitized. Thus, the taxable service of 'cleaning' would include only those services wherein the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pest infestation. The impugned order, therefore, erred in treating the term extermination as being equivalent to incineration . 29. It would be also be pertinent to refer to the CBEC Circular dated July 13, 2007 which specifically provides that incineration of waste is not taxable under business auxiliary service or any other taxable service. The relevant portion of the Circular is reproduced below: 03. The matter has been examined by the Board. The view of the Board is that the incineration/ shredding of bio-medical waste can, no stretch of imagination, be called as processing of goods , even if in certain cases the shredded materials may be used as fillers etc. Further, the activity also does not qualify to be called as provision of service on behalf of the client. This is because the taxable activity envisaged under this category of business auxiliary service is that while the client is obliged to provide some service to a 3rd person but instead of the client providing such service, the service provider provides the such service to the 3rd person, on behalf of the client i.e. acting as an agent of the client. Admittedly, in the instant case, there is no 3rd person. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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