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2016 (1) TMI 393 - CESTAT CHENNAI

2016 (1) TMI 393 - CESTAT CHENNAI - TMI - Scope of Works Contract Service - extended period of limitation - bonafide belief - demand of service tax on works contract service of construction of pipeline and other structures for providing water supply for Tamil Nadu Water Supply and Drainage Board, in the Ananthapuram Town Panchayat of Villupuram - there was sufficient scope for the appellants to come into a bonafide belief that even during the said period, in absence of clear definition of the Wo .....

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s required as to whether what was not covered under the erection, commissioning and installation service earlier, could be covered under the new service.

Since, in the instant case the issue appears to be latent to the interpretation of law at the initial stage of introducing due service, there was scope of bonafide belief that the appellants did not have to pay tax. Therefore, viewing from this angle, the non obtaining of service tax registration and non payment of tax could be due .....

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isted during the relevant time, would come to the appellant's rescue so far as invoking of the extended period of time limit is concerned. - Demand set aside - Decided in favor of assessee. - ST/623/2011 - FINAL ORDER No. 41792 / 2015 - Dated:- 1-10-2015 - Shri R. Periasami, Technical Member And Shri P.K. Choudhary, Judicial Member For the Petitioner : Shri K.S. Venkatagiri, Adv., For the Respondent : Shri B.Balamurugan, AC (AR) ORDER Per: P.K. Choudhary The appellant filed this appeal against t .....

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sioner (Appeals) upheld the impugned order in so far as the demand and Section 77 and 78 penalty is concerned and waived the penalty under Section 76 of the Act. On appeal before this Tribunal, vide Tribunal s Final Order No. 40386/2013 dated 22.07.2013 dismissed the condonation of delay application and consequently the appeal along with stay application is also dismissed. The appellant preferred CMA before the Honble High Court of Madras and the Hon ble High Court in their Order dated 24.04.20 .....

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the issue in the present appeal relates to demand of service tax on works contract service of construction of pipeline and other structures for providing water supply for Tamil Nadu Water Supply and Drainage Board, in the Ananthapuram Town Panchayat of Villupuram. The services were provided during the period 1.10.2007 to 31.3.2009. As per the Order-in-Original and OIA, the services would fall under the works contract service and as such is liable to service tax. He further submitted that the se .....

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ion and it rejected the submission of the appellant that the provision of water supply by Municipal Corporation or Panchayat, could not be considered for the purpose of commerce or industry. He further submitted that they have already paid the demand and penalties arising out of the Order in Appeal dated 18.10.10, and submitted copies of TR-6 challans in proof of payment. He further submits that they made the payment under protest. He also submits that their case is covered by the Larger Bench d .....

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ellant for the identical services rendered under Commissioning or Installation Service . The Appellant appealed against the demand and the Hon ble CESTAT held that the services are not liable to tax under Commissioning or Installation Service vide decision in Indian Hume Pipes Co. Ltd., Vs., Commissioner of Central Excise, Cochin, 2008-TIOL-1665-CESTAT-MAD. Copy of the order is at Annexure E (Page 36) of the Appeal book. The order also holds that a water supply project being an infrastructure fa .....

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submitted that as regards the question of levy of service tax after introduction of works contract service, the Larger Bench of the Hon ble CESTAT in the case of Lanco Infratech Ltd., and others Vs., Commissioner of Central Excise, Hyderabad (2015-TIOL-768-Cestat-Bang-LB), held that the service relating to construction/laying of pipelines for transmission of water for municipal supply would not amount to erection, commissioning and installation service. The finding of the Cestat in the earlier .....

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that the services of construction of pipeline is meant for water supply Corporation or Municipality, not being primarily for commerce or industry, no service tax would be leviable. Based on the decision of the Larger bench which is binding, the Ld. Counsel pleaded that the appeal may be allowed. 6. We have carefully considered the submissions of both sides and perused the records. On perusal of the grounds of appeal we find that the period involved in the subject appeal is from 01.10.2007 to 31. .....

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case, the Commissioner (Appeals) has recorded his findings in para 4.1 of the impugned Order in Appeal wherein he has observed that the service of laying the pipelines would come under the scope of Works Contract Service from 01.06.2007. 7. On perusal of the definition of erection, commissioning and installation service prior to 01.06.2007 and the definition of Works Contract Service, it is possible to hold that there may be distinction between the definitions of the two services but yet it c .....

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ven though there maybe transfer of property involved, yet it would be reasonable for the appellants to contend that there is no erection, commissioning or installation of any of the items specified in the Works Contract Service. 8. Without going into the merits of the case, we are of the view that there was sufficient scope for the appellants to come into a bonafide belief that even during the said period, in absence of clear definition of the Works Contract Service to cover the specific service .....

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