TMI Blog2010 (5) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... AL MEMBER P. Karthikeyan, Technical Member - The appellants are required to pre-deposit the following amounts for hearing the captioned appeal : (i) Service Tax Rs. 40,15,851 (Rupees forty lakhs fifteen thousand eight hundred and fifty one only) along with applicable interest. (ii) Penalty Rs. 40,15,851 (Rupees forty lakhs fifteen thousand eight hundred and fifty one only) under section 78 of the Finance Act, 1994 ('the Act'). (iii) Penalty Rs. 1,000 (Rupees one thousand only) under section 77 of the Act. 2. Appellants M/s. Ramky Infrastructure Ltd. and WPIL JV (a Joint Venture) had executed the following item of work during the period June 2007 to May 2008 under a contract with the Government of Andhra Pradesh : "Low Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity. He did not accept the contention that the work pertained to construction of canal for conveying water for irrigation and though canal was a civil structure it was not meant for commerce or industry. He found that as per the Explanation to the entry 'Works Contract' under section 65(105)(zzzza) of the Act meant a contract wherein, (i) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods; and (ii) such contract is for the purposes of carrying out, (a) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on CBEC Circular No. 116/10/2009-ST, dated 15-9-2009, which had clarified that a canal system built by the Government or under Government Projects, did not fall under commercial activity and was not chargeable to service tax. It is also argued that in Daelim Industrial Co. v. CCE 2003 (155) ELT 457/[2007] 7 STT 184 (New Delhi - CESTAT), Tribunal held that a works contract on turnkey basis could not be vivisected and a part subjected to tax. Further plea advanced is that the works contract was for carrying out 'construction of a new building or a civil structure or a part thereof, or of pipeline or conduit, primarily for the purpose of commerce or industry' of clause (b) of the Explanation and therefore, clause (e) would not cover the subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents, we are of the prima facie view that the impugned activity is classifiable under "Works Contract Service' in the nature of turnkey projects including 'engineering, procurement and construction or commissioning (EPC) projects' envisaged in clause (e) to Sl. No. (ii) of the Explanation to the entry under section 65(105)(zzzza) of the Act. From the break up of the work involved available on record excavating and digging of underground approach canal comprises 15 per cent of the cost. Therefore, the entire activity cannot be classified under 'Site Formation and Clearance, Excavation and Earth Moving and Demolition' as argued by the appellants. The construction of canal accounts for 20 per cent of the total cost. Therefore, the activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax as sale of goods, and (ii) such contract is for the purposes of carrying out, (a) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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