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P.B. RATHOD Versus COMMISSIONER OF CENTRAL EXCISE, NASHIK

Liability of Service Tax on Completion and Finishing Services, painting of properties belonging to the railways and bus stand, service of painting of plant and machinery of NTPS and service of laying underground sewerage pipeline

Held That:- Completion and Finishing Service are covered under ‘Construction of Complex’ defined in Section 65(30a) and NTPS have constructed residential quarters for their own employees and not for personal use; thus not liable to service tax.

Pai .....

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ity covered under Commercial or Industrial Construction Service under Section 65(25b) but they charged for electricity generated so as to able to provide electricity to public on self-sustaining basis; thus activity cannot be called commercial and service tax is not payable on the same.

Laying of sewage pipe does not get covered in the activity of drain laying as both are not synonymous thus the benefit should go in favour of Appellant; same is not taxable to service tax. Appeal dism .....

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ng the demand of ₹ 14,73,190/-, interest under Section 75, penalty of ₹ 2,00,000/- under Section 77 and penalty of ₹ 14,73,190/- under Section 78 with option to reduce the penalty to 25% of this amount if the duty, interest and reduced penalty are paid within 30 days of the communication of the Order-in-Appeal. 2. The appellant was providing Completion and Finishing Services under the categories of Commercial or Industrial Construction Service and Construction of Complex S .....

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r (Appeals). 3. Heard both sides and considered the submissions. 4. Learned counsel appearing for the appellant contended that the residential quarters of NTPS do not come under the category of Construction of Complex Service under Section 65(30a). Regarding painting of properties belonging to railways it was argued that Commercial or Industrial Construction Services excludes services provided in respect of railways under Section 65(25b). Similarly painting services provided to State T .....

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mpts construction which are carried out for the purposes proving civic amenities such as sanitation. Original authority had considered this activity falling under Commercial or Industrial Construction Service but the appellate authority classified the service under Erection, Installation or Commissioning Service and therefore went beyond the allegations in the show cause notice. Learned counsel relied on the judgment of the Tribunal in the case of Nagarjuna Construction Company v. CCE, Hyderabad .....

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ake up each activity undertaken by the appellant separately. 6.1 As far as painting of residential quarters of NTPS are concerned, we agree with the learned counsel that Completion and Finishing Service such as painting are covered under the service of Construction of Complex defined in Section 65(30a). The definition of this service, under Clause b , includes completion and finishing services in relation to residential complex . Residential complex defined under Section 65(91a) exclude bui .....

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he railways is excluded from the definition of Commercial or Industrial Construction Service. Revenue has taken a very narrow view by considering the word railways to mean railway track, railway bridge, railway station only. The Commissioner has not given any basis for this interpretation. We are of the view that the term railways is wide enough to cover all properties of railways because the phrase used in Section 65(25b) is but does not include such services provided in respect of roads, airpo .....

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ruction Service under Section 65(25b). This definition includes services such as painting of buildings, civil structures which are primarily used for commerce or industry. We do not agree with the Commissioner (Appeals) that NTPS is established for profit earning. He has also taken a narrow view of Board s Circular No. 80/10/2004-S.T., dated 17-9-2004 which states that generally Government buildings or civil constructions are used for residential, office purposes or for providing civic amenities .....

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ctivity on which demand has been confirmed i.e. service of laying underground sewerage pipeline, the appellant have relied on Board s Circular No. 80/10/2004 (supra) to justify that service tax would not be leviable. The Commissioner (Appeals) has viewed that the activity of plumbing, drain laying or other installations for transport of fluids is specifically covered under Section 65(105)(39a)(ii)(b) under the category of erection, commissioning or installation service. Adjudicating authority ha .....

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