CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL HYDERABAD REGIONAL BENCH - COURT NO. – I Service Tax Appeal No. 30932 of 2018 (Arising out of Order-in-Original No.GUN-EXCUS-000-COM-009-17-18-S.Tax dated

28.03.2018 passed by Commissioner of Central Tax, Guntur)

M/s Srinivasa Out Sourcing .. APPELLANT Services Pvt Ltd., H.No. 8/241, 1st Floor, Ashok Nagar, MG Road, Industrial Estate, Vijayawada, Andhra Pradesh – 520 007.

VERSUS Commissioner of Central Tax .. RESPONDENT Guntur P.B.No. 331, C.R.Building, Kannavari Thota, Guntur, Andhra Pradesh – 522 004.

AND Service Tax Appeal No. 30933 of 2018 (Arising out of Order-in-Original No.GUN-EXCUS-000-COM-009-17-18-S.Tax dated

28.03.2018 passed by Commissioner of Central Tax, Guntur)

Shri L. Subbarami Reddy, Ex-Director .. APPELLANT M/s Srinivasa Out Sourcing Services Pvt Ltd., H.No. 8/241, 1st Floor, Ashok Nagar, MG Road, Industrial Estate, Vijayawada, Andhra Pradesh – 520 007.

VERSUS Commissioner of Central Tax .. RESPONDENT Guntur P.B.No. 331, C.R.Building, Kannavari Thota, Guntur, Andhra Pradesh – 522 004.

APPEARANCE:

Shri L. Venkateswara Rao, Advocate for the Appellant.

Shri V. Srikanth Rao, Authorized Representative for the Respondent.

CORAM: HON’BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL)

HON’BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL)

FINAL ORDER No. A/30044-30045/2026 Date of Hearing: 09.12.2025 Date of Decision: 27.01.2026 [ORDER PER: ANGAD PRASAD]

M/s Srinivasa Outsourcing Services Ltd., and Shri L. Subbarami Reddy, Director of M/s Srinivasa Outsourcing Services Ltd., have filed these two appeals against the Order-in-Original dated 28.03.2018 (impugned order) passed by the Commissioner of Central Tax, Guntur. Since, both the appeals are related to same Order-in-Original, therefore both the appeals are taken up simultaneously to decide together.

2. The facts in brief are that the appellant is engaged in providing cleaning services, sanitation services, manpower supply services etc., to the Government of Andhra Pradesh through M/s Andhra Pradesh Health and Medical Housing & Infrastructure Development. The appellant entered into agreements with various Government Hospitals including Government Mental Care Hospital, Visakhapatnam for providing above mentioned services.

3. The appellant had not paid service tax on the value of the cleaning and sanitation services provided to Government Hospital, since these services were exempted from service tax by virtue of Notification No. 25/2012-ST dated 20.06.2012.

4. A show cause notice no. 41/2017-18 dated 16.06.2017 has been issued against the appellant for the period 01.07.2012 to 31.03.2016.

5. The appellant furnished detailed reply vide letter dated 20.07.2017 and contested that the sanitation services provided by them to Government Hospital are in the nature of public health and sanitation conservancy and exempted from service tax under above mentioned notification.

6. Learned Commissioner vide impugned order held that the services referred by the appellant would fall under the category “taxable services” in terms of Section 65B(51) of the Finance Act, 1994 and also denied the benefit of Notification No. 25/2012-ST dated 20.06.2012 and confirmed the demand of service tax amounting to Rs. 3,40,56,246/- along with the applicable interest under Section 73(2) read with Section 75 of the Finance Act and also imposed penalty of Rs. 5,000/- under Section 77 of the Finance Act. Learned Commissioner also imposed penalty equal to service tax and Rs. 10,000/- penalty on Shri L. Subbarami Reddy, Director of the appellant company M/s Srinivasa Outsourcing Services Ltd., under Section 78 of the Finance Act 1994.

7. M/s Srinivasa Outsourcing Services Ltd., and Shri L. Subbarami Reddy, Director of M/s Srinivasa Outsourcing Services Ltd., on being aggrieved by the impugned order, filed above appeals respectively before the Tribunal.

8. Learned Counsel for the appellant submits that the appellant awarded work/contract of sanitation and cleaning of various Government Hospitals