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2018 (10) TMI 551 - AT - Service TaxClassification of services - appellant were executing various contracts for the Andhra Pradesh State Irrigation Development Corporation Ltd., Panchayat Raj RWS, Public Health etc., on composite/Turnkey basis - works contract - demand for the period prior to 01.06.2007 - whether during the period in question, the activities under taken by the appellant would get covered under erection commissioning and installation services or otherwise? Held that:- Since, it is undisputed that the activity under taken by the appellant is laying of pipeline for irrigation projects for the period involved under a composite contract and the show cause notice also demands service tax under erection, commissioning and installation charges, we find that the entire demand needs to be set aside as unsustainable. Similar issue came up before the Larger Bench of the Tribunal in the case of Lanco Infratech Limited [2015 (5) TMI 37 - CESTAT BANGALORE (LB)], where it was held that Where under an agreement, whether termed as works contract, turnkey or EPC, the principal contractor, in terms of the agreement with the employer/ contractee, assigns the works to a sub-contractor and the transfer of property in goods involved in the execution of such works passes on accretion to or incorporation into the works on the property belonging to the employer/ contractee, the principal contractor cannot be considered to have provided the taxable (works contract) service enumerated and defined in Section 65(105)(zzzza) of the Act. Also, prior to 01.06.2007 the demand on the appellant cannot be sustained in view of the judgment of the Apex Court in the case of Larsen & Tourbo Ltd., [2015 (8) TMI 749 - SUPREME COURT] as it is the fact that contracts which are awarded to the appellant are for erection & commissioning of various irrigation projects. That would mean that the entire contract is a works contract. Appeal allowed - decided in favor of appellant.
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