FACTS: Assessee being a construction company, received a work order of construction of building for an Educational Institution. For the purpose of execution of the work order, assessee was engaged in excavation for foundation in soil & soft rock including tree removing by using excavation machines.

Assessee contended that they have undertaken supply of tangible goods service & not excavation activity. Supply of tangible goods service’ is a taxable service as per the Finance Act as amended, which means any service provided or to be provided to any person by any other person in relation to supply of tangible goods including machinery, equipments and appliances for use without transferring right of possession and effective control of such machinery, equipments & appliances. It was also contended that since the activity undertaken by the appellant was for an educational institution & hence should be held as a non taxable service during the relevant period as per Service Tax Act, 1994 & based on the above fact pleaded for grant of stay.

However due to wrong classification of impugned service, service tax was demanded along with the interest & penalties.

HELD: As per section 65(97a) of the Finance Act, 1994 "site formation and clearance, excavation and earthmoving and demolition" includes

I. drilling, boring and core extraction services for construction,

II. soil stabilization,

III. drilling for passage of cables or drain pipes,

IV. land reclamation work,

V. top soil stripping work,

VI. demolition and wrecking of building, structure or road.

Mumbai Tribunal rightly held that the activity undertaken by the appellant i.e ‘Excavation for foundation in soil & soft rock including tree removing’ will fall under ‘Site preparation, excavation and earth moving, demolition service’. Hence the contention of the appellant that the impugned activity falls under ‘Supply of tangible goods service’ or alternatively that the same is non taxable service is not correct.

Since appellant has failed to make out a case for complete waiver of pre-deposit of demands adjudged against him, Tribunal ordered for pre-deposit in addition to the amount already paid within stipulated period.

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