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2014 (2) TMI 149 - AT - Service TaxWorks contract service - laying of pipelines - 'Erection, Commissioning or Installation Service' or 'Commercial or Industrial Construction Service' prior to 01/06/2007 - Held that:- works executed by the petitioner more appropriately fall within sub-clause (b) of Section 65(25b) of the Act and are therefore CICS and not ECIS as concluded by the learned adjudicating authority. Section 65(25b) clearly limits the scope of the taxable service defined therein to a service provided in relation to works which are used primarily in commerce and industry or intended for commerce and industry. It is the unequivocal case of the petitioner that all these works were executed for the State Government, for irrigation projects and for supply of drinking water and not for commerce or industry and therefore there is no liability to service tax. The adjudication order did not advert to this contention of the petitioner, since the order proceeded on the premise that services provided prior to 01/06/2007 require to be classified as ECIS and since Section 65(39a) does not restrict the definition of the taxable service defined therein to services provided in relation to commerce or industry only, service tax is leviable. On the basis of the analysis in the adjudication order, it is not very clear whether all works and the associated services executed or provided by the petitioner prior or subsequent to 01/07/2007 were in relation to laying of pipeline or whether a few of these were outside the scope of construction of pipeline and therefore might fall within sub-clause (e) of Section 65(105)(zzzza) of the Act. We, therefore, proceed at this stage of the matter on the basis of the assertion on behalf of the petitioner that all the works pertain to laying/construction of pipeline falling within Section 65(105)(zzzza)/(b) and not sub-clause (e) of the said provision and the observations in adjudication order, that these are pipeline construction works. Since under sub-clause (b) of Section 65(105)(zzzza) of the Act (for the period subsequent to 01/06/2007), inter alia construction of pipeline primarily for the purposes of commerce or industry falls within the ambit of the definition of works contract service and services provided by the petitioner under the several agreements with the State Government were for irrigation or drinking water supply purposes, we are prima facie of the view that these not being commercial or industrial purposes are excluded from exigibility to service tax, as falling outside the purview of the taxable service - Decided in favour of assessee.
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