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2017 (7) TMI 687 - CESTAT HYDERABADWorks contract service - Erection, Commissioning or Installation service - bidding for projects relating to various works in different States - the appellant was required to perform and undertake “works” of designing, supplying, fabrication, inspection, testing, installation and commissioning of pressure shaft liners otherwise called ‘steel liners/penstocks’ forming part of the respective projects contracted upon by the main contractors - department has sought to bring the impugned activity into the fold of Erection, Commissioning or Installation service (ECIS), for the period January 2005 to March 2010 and under Works Contract Service (WCS), from April 2010 to March 2012. Held that: - It is not disputed that assessee was functioning as a sub-contractor to main contractors for hydro-electric projects in Himachal Pradesh and Maharashtra. Assessee was required to perform and undertake activity of Installation and Commissioning of Pressure shaft liners also called “steel liners/penstocks”. As the dispute is around, the taxability or otherwise of this particular activity done by the assessee, we proceed to examine the same. Towards this end, it would be useful to understand the nature and scope of the said activity - This activity is performed within the excavated tunnel. The tunnel is formed and complete only after the steel liners are put in place and the space between liner and rock is filled with concrete and pressurised cement grout. It is also not disputed that these tunnels have been made in relation to hydro-electric projects as underground passages for conveyance of water. Thus, there is no doubt that the activity of fabricating penstock/steel liners are essential for the completion of tunnels. The work has been performed by the assessee on specific sub contract agreements for specific works detailed therein, the nature of work cannot, but, be otherwise than “Works Contract” and definitely not under “ECIS” as perceived by the department for the period upto March 2010. The nature and scope of the activity performed by the assessee also answers to the scope of works contract defined in Section 65 (zzzza) of Finance Act, 1994 for fabrication and installation work in respect of tunnel for transport of water from the Dam projects - Once it is clear that the impugned activity comes within the ambit of “works contract”, the same would also be taxable only w.e.f. 01.06.2007, when the said service was brought into the fold of service tax. The attempt by the department to categorise the very same activity for an earlier period under ECIS cannot then sustain. We find that the impugned activity of the assessee was nothing but “works contract service” in respect of tunnels/dams. We further find that since the works contract was in respect of tunnels for dams/power projects, the same would then be excluded from taxability thereunder in view of the exclusion in Section 65(105)(zzzza) of Finance Act, 1994 - demand cannot sustain - appeal allowed. Refund claim - claim on the basis that the activity does not amount to providing of taxable service as ECIS - Held that: - as there can be no taxability on the impugned activity during the period of dispute, the said amount would be refundable only for limited purpose of ascertaining whether the claim is hit by unjust enrichment or otherwise, which aspect has not been considered in the impugned order, we remand the matter to the original authority - matter on remand. Appeal allowed - part matter on remand - decided in favor of appellant.
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