TMI Blog2017 (3) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal allowed - decided in favor of appellant. - ST/51841/2014 - ST/A/70210/2017-CU[DB] - Dated:- 21-2-2017 - Mr. Anil Choudhary, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri Ruchir Bhatia, Adv. for the Appellant (s) Shri Rajeev Ranjan, Joint Commr. (A.R.) for the Department Per Mr. Anil Choudhary The appellant is engaged in various activities of constructions of civil structures including pipelines for sewage etc., is in appeal against order in original dated 23/12/13 passed by Commissioner of Central Excise, Customs Service Tax, Noida, demanding service tax of ₹ 13,48,28,865/- with interest and equal amount of penalty under Section 78 and further penalty of ₹ 10,000/- imposed under section 77 (1) (b) of the Finance Act, 1994. 2. The brief facts as per the show cause notice dated 18/10/12 for the period under dispute 2007-08 to 31 st March 2011, are that the appellant is registered under the provisions of service tax for construction and engineering service', commissioning and installation services' and works contract service'. Pursuant to audit it appeared to Revenue that the appellants have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of plant, machinery, equipment or structures, whether pre-fabricated or otherwise; or installation of plumbing, drain laying or other installations for transport of fluids, enumerated in Section 65(105) (zzd) and defined Section during 16-6-2005 to 31-5-2007; or must be classified under CICS, as amounting to construction of pipeline or conduit; and if classifiable under the later provision, whether the activity is not taxable since it is not used or to be used, engaged or to be engaged primarily for industry or commerce ? (B) Whether construction of canals for irrigation purposes and laying of pipelines including as part of lift irrigation systems, undertaken for the Government/Government undertakings is liable to Service Tax under WCS as turnkey projects, including engineering, procurement and construction or commissioning projects under clause (e) of Explanation (ii) in the definition of WCS or is excluded from the ambit of WCS since it is in respect of a Dam and thus Stands excluded from WCS, as defined? (C) Whether, turnkey projects, including engineering, procurement and construction or commissioning (EPC) projects specified in clause (e) is merely an enumeration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fiable as CICS. Where the pipeline/conduit laying is executed for Government or Government Undertakings as part of irrigation, water supply, or sewerage projects, the works are not excisable to service tax under CICS (prior to 01.06.2007), since these are not primarily for commercial or industrial purposes and are excluded from the scope of the taxable services qua the exclusionary clause definition of CICS, in Section 65 (25b) of the Act. 3.3 Considering the issue (B), (C) (D) the noticed herein above, the larger bench observed as follows: - In view of the Special (5 Member) Bench decision in the Larsen Toubro Limited reference, it follows that a works contract is exigible to Service Tax even prior to 1-6-2007, In view of Indian Hume Pipe Co, Limited; and Alstom Projects India Limited it follows that a turnkey/EPC contract is exigible to Service Tax prior to 1-6-2007, under the appropriate taxable service such as ECIC, CICS or COCS. From this position it inexorably follows that clauses (a) to (e) of the definition of WCS in Explanation (ii) thereof are enumerations of taxable services drawn substantially from definitions and integers of existing taxable services such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f commerce or industry is an activity falling within the definition of WCS. This provision in the definition of WCS is extracted from the definition of CICS, is pari materia, Construction of pipeline or conduit (otherwise than under a turnkey/EPC mode), when executed for Government/Government undertakings for transmission of water or sewerage would be outside the ambit of levy of tax, in terms of the definition itself, since this would undisputedly fall within the ambit of sub-clause (b) of WCS. 19. On the aforesaid analyses we hold [on issues (A), (B) (C)] that construction of canals under a dam for transmission of water or sewerage; or construction of pipelines or conduits for conveyance of water for irrigation, domestic consumption or sewerage disposal even where executed as turnkey/EPC contracts; (i) would be classifiable under clause (b), Explanation (ii) of Section 65(105)(zzzza); (ii) construction of canals, pipelines or conduits for Government/Government undertakings for augmentation of irrigation, water supply or sewerage disposal would be for a non-commercial, non-industrial purpose or user and thus excluded in view of the exclusionary clause in clause (b) of WCS d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
