TMI Blog2010 (8) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... n record the appellant is engaged in the manufacture of textile machineries falling under Chapter 84 of Central Excise Tariff Act, 1985. They entered into a contract with their customers for supply of textile machinery and the sale price quoted by them was inclusive of Installation and Commissioning charges. By taking the entire contract value as the assessable value of the machinery, Central Excise duty was paid by them. 2. As a result of audit objection, it was noticed that the purchase orders/sales contracts of the buyers were inclusive of Erection, Installation and Commissioning of the textile machinery manufactured by them and as such, the appellant was required to pay the service tax under the category of Erection, Commissioning and Installation charges. 3. Accordingly, the appellants were asked to provide the charges recovered by them from their customers for the services provided in respect of Erection, Installation and commissioning. The appellants vide their letter dated 12-7-2005 submitted that since their sale price is inclusive of Erection and Commissioning charges and they are not dis charging the said charges separately and the amount of said charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner has accepted that they have engaged sub-contractors for the purpose of Erection and Installation, who had charged service charges from them and the said sub-contracts has paid the service tax on the said service charges, which is ultimately reimbursed by the appellants. As such, he submits that the impugned order is against the settled position in law by the various pronouncements of the Tribunal as also by the Hon'ble High Court. 6. He also submits that if the appellants would have chosen to claim deduction of Installation and Erection charges from the assessable value of the machinery for the purposes of payment of Central Excise duty and would have chosen to pay service tax on the said amount, the actual amount of duty paid by them would have been lower by an amount of Rs. 3.60 Lakhs approximately. Having paid the excise duty on the entire value, the appellant do not stand benefited. 7. As against the above arguments of learned advocate, learned SDR appearing for the Revenue reiterates the reasoning adopted" by the Commissioner in his impugned order by drawing out attention to the definition of Erection, Commissioning and Installation services. Learned DR s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation agency, in relation to, - (i) erection, Commissioning or installation of plant, machinery or equipment; or (ii) installation of - (a) electrical and electronic devises, including wirings or fittings therefore; or (b) plumbing, drain laying or other installations for transport of fluids; or (c) heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work; or (d) thermal insulation, sound insulation, fire proofing or water proofing; or (e) lift and escalator, fire escape staircases or travelators; or (f) such other similar services; (III) From 1-5-2006 "erection, commissioning or installation" means any service provided by a commissioning and installation agency, in relation to' - (i) erection, commissioning or installation of plant, machinery, equipment or structures whether pre-fabricated or otherwise; or (ii) Installation of - (a) electrical and electronic devices, including wirings or fittings therefore; or (b) plumbing, drain laying or other installations for transport of fluids; or (c) heating, ventilation or air-conditioning incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epared. By taking note of the precedent decisions, it was observed that the manufacture process dose not necessarily mean that it has to be excisable goods but would include any process which is incidental or ancillary to the completion of manufactured product. As such, the Hon'ble High Court observed that the process of manufacture as defined under Section 2(14) of the 1915 Act falls within the ambit and sweep of the Section 2(f) (1) of Central Excise Act, 1944 and therefore, there can be no levy of service tax on the manufacturer in view of the clear postulate under Section 65(76b) of the Finance Act, 2005. Though the above judgment was given in the different facts and circumstances but we find that observations made by the Hon'ble High Court fully covers the legal issue in the present case. 12. Similarly in the case of CCE, Vapi v. Alidhara Textool Engineers Pvt. Limited - 2009 (14) S.T.R. 305 (T) = 2009 (239) E.L.T. 334 (Tri. - Ahmd.) it was observed as under :- "4.1 In this case erection and commissioning charges have been included in the cost of the machines sold. The appellants have selected the agency to do this work and once the purchaser enters into an agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e service tax on the activities undertaken by them. Hence the impugned order does not hold any merit on this issue. The same is set-aside and the appeal filed by M/s. Neo Structo Construction Limited is allowed." 14. Ratio of all the above decisions is to the effect that where an activity so Integrarely related and connected with the manufacturing activity and the purchase orders are for the complete plant ind machineries, duty commissioned, without showing any segregated amount recovered for erection and commissioning and where the entire contract value is taken as an assessable value for the purpose of payment of excise duty, no service tax is liable to be paid by the assessee. The decision of the Tribunal in the case of Lincoln Helios (India) Limited relied upon by the Commissioner in his impugned order laying to the contrary, cannot be followed inasmuch as the same stands rendered by a Single Member Bench in contradiction to the Divisional Bench judgment available in the case of Allengers Medical Systems Limited (referred supra). Further the said judgment in the case of Lincoln Helios (India) Limited was rendered in the year 2006 whereas the Allengers Medical Systems ju ..... 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