TMI Blog2010 (3) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside and the appeal filed by M/s Neo Structo Construction Ltd is allowed. In view of the above discussion, both the appeals are disposed off. - ST/189 & 191/2007 - A/338-339/2010-WZB/AHD - Dated:- 18-3-2010 - Mr. Ashok Jindal, Member (Judicial) and Mr. B.S.V. Murthy, Member (Technical) Shri V. Sridharan, Advocate for the Assessee. Shri J.S. Negi, SDR for the Revenue. [Order Per: Mr. Ashok Jindal]. - M/s Neo Structo Construction Ltd. (NSCL for short) has filed the appeal against the impugned Order-in-Original No.04/Service Tax/2007, dt.31.08.07, confirming demand of service tax amounting to Rs.6,52,12,824/- under Section 73 of Finance Act, 1994 for providing taxable service of Erection, Commissioning or Installation rendered by the NSCL during the period from 01.07.03 to 10.09.04 and 10.09.04 to 31.07.05 along with interest at applicable rates and penalties under Section 76 and Section 78 of Finance Act,1994. 2. The Revenue has also filed an appeal against the said impugned order for dropping the demand of service tax of Rs.1,49,25,478/- for rendering the services under Maintenance Repair service. 3. The facts of the case are that NSCL is enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the said adjudication order, both M/s NSCL and the Revenue have come in appeal. We find that there are two issues involved in this case: (i) Whether NSCL is liable to pay the service tax for 'Maintenance Repairs Service in the facts and circumstances of the case or not? (ii) Whether NSCL is liable to pay the service tax under the category of Erection, Commissioning Installation Service in the facts and circumstances of the case or not? 9.0 We take up the issue No.(i) first. 9.1 The Revenue has challenged the impugned order on the ground that there is a maintenance or repair work carried out by the appellants is on the basis of maintenance/repair agreement which though is part of the works contract, can be separated (that is to contract is divisible.) The jobs like SS valve erection, Control Valve erection, FRP piping removal, titanium piping, anodizing erection, pinhole repair, weld repair for purification reactor, baffle inspection, replacement of tubes, refractory castings, catalyst replacement, repair of transition assembly, joint erection dismantling of 12 layers of coil for rectification etc. are in the nature of maintenance or repair of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir service was provided under a maintenance contract or agreement. 9.5 The adjudicating authority has relied on the decision of this Tribunal in the case of CCE Vs. M/s Dusad Transformers Switchgears (P) Ltd. as reported in 2007 (5) STR 37 (Tri-Delhi). In that case, it was held that It is a work contract. The contract provides rates for repair of transformers and also provides guarantee for the transformers repaired by the respondents. As per Board's Circular dt.27.7.05, prior to 16.06.05 repair of service carried out under the contract other than the maintenance contract or agreement was not covered within purview of service tax. In absence of any maintenance contract, we find no infirmity in the impugned order. The appeals filed by the Revenue are dismissed. We find this decision applicable to facts of this case also. 9.6 We have gone through the decision of this Tribunal in the case of M/s Uni Power System Ltd. Vs. CCE as reported in 2007 (7) STR 590 (Tri-Bang.), wherein the issue was decided in favour of the appellant following the findings of this Tribunal in the case of M/s Cochin Shipyards Ltd. as reported in 2007 (7) STR 291 (Tribunal). Relevant port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract or agreement was not covered within the purview of service tax. Maintenance or repair, including reconditioning or restoration or servicing of any goods or equipment, except motor vehicle (which is taxable under the category of authorized service station), undertaken as part of any contract or agreement (not necessarily maintenance contract or agreement) is now liable to service tax under the category of taxable service. To attract service tax under this category, the contract or agreement need not necessarily be a maintenance contract/agreement. 9.8 This circular also supports the view that the service of maintenance and repair should be under a Maintenance or Repair Contract/Agreement to attract levy of service tax prior to 16.06.2005. 9.9 We find that in the present case, there was no separate maintenance/repair contract between the parties. The Department's case is that the contract/ agreement/ work order can be segregated into two contracts by vivisecting the works contract. However, to vivisect, we have to see the agreement and see what was the intention. There is no finding/evidence/observation flowing from the agreement that both parties intended repair/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ev Electrical Works Vs. CCE Chandigarh as reported in 2008 (10) STR 494 (Tri-Del.), wherein it was held that the work of laying of pipes for wires, fixing junction box and digging earth for laying cables, undertaken by electrical contractors relates to electrical work and not civil work and therefore is not covered under Clause (39a) of Section 65 of Finance Act, 1994. 12. On the other hand, the learned SDR reiterated the impugned order and submitted that the activities of the appellant are not excisable. Hence, they are liable to pay service tax. He further placed reliance on the decision of the Tribunal in the case of M/s Dodsal Pvt. Ltd. Vs. CCE Bangalore as reported in 2006 (193) ELT 518 (Tri-Mumbai), wherein it was held that fabrication of tanks from bits and pieces of plates does not amount to manufacture. Hence, the activities undertaken by the appellant are not manufacturing activity. Therefore, they are liable to pay the service tax. 13. After considering the submissions made by both sides, it is necessary for us to go through the provisions of law with regard to the applicability of Erection, commissioning and installation services. Section 65 (39a) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Circular No.B2/8/2004-TRU, dt.10.9.04, as per the changes in the Budget for 2004-2005, the service tax on installation commissioning was extended to erection services also and Board has clarified that erection would refer to civil work to installation/commissioning of a plant or machinery. The extract relating to the clarification is reproduced below. 14. Extension of service tax on installation and commissioning, to erection services: Service tax was levied on commissioning and installation of plant, machinery and equipment w.e.f. 1.7.2003. The general practice is that erection, commissioning and installation are contracted as a composite package. There have been a number of doubts and queries regarding the distinction between erection and commissioning/installation. Erection would refer to the civil works to installation/commissioning of a plant or machinery. In this year's budget, the scope of service tax under installation and commissioning is being extended to include erection also. Erection involves civil works, which would otherwise fall under the category of construction services. However, in case of a composite contract for erection, commissioning and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant is covered under Chapter 73.08 of the Central Excise Tariff and the activity of the appellant is covered under Chapter subheading 7308.50 which reads that all goods fabricated at site or work for use in construction work at site. 26. From the above, it is clear that the activity undertaken by the appellant covered under Central Excise Tariff, amounts to manufacture. The decision referred by the learned SDR is not applicable in this case as in that case the work was undertaken by the appellant under a works contract for fabrication and laying of M.S. Pipes and in that process they fabricated the tank from bits and pieces of plates. The issue in that case was whether the resultant product at site which was part of the project was marketable and liable to Excise duty or not and in that context, it was held that the tanks were not parts of pipelines and hence the erection of tanks at site was held not amounting to manufacture. Here the issue before us is that whether the fabrication of structures by the appellants at the site of their principal amounts to service and is liable to service tax under the category of erection, commissioning and installation service. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
