TMI Blog2023 (11) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... of service tax. In the present case, the activity of laying of pipelines is done by the appellant for TWAD Board which is for the Government and included for supply of drinking water project. The very same issue was considered by the Larger Bench of the Tribunal in the case of M/S. LANCO INFRATECH LTD. AND OTHERS VERSUS VERSUS CC, CE ST, HYDERABAD [ 2015 (5) TMI 37 - CESTAT BANGALORE (LB)] where it was held that Construction of canals for irrigation or water supply; construction or laying of pipelines/ conduits for lift irrigation conceived and integrated into a dam project, must be classified as works contract in respect of dam and is thus excluded from the scope of Works Contract Service defined in Section 65(105)(zzzza) of the Act, in view of the exclusionary clause in the provision. The decision of the Larger bench was followed recently by the Hyderabad Bench of the Tribunal in the case of PROGRESSIVE CONSTRUCTIONS LTD. VERSUS COMMISSIONER OF SERVICE TAX HYDERABAD SERVICE TAX [ 2023 (4) TMI 1132 - CESTAT HYDERABAD] to hold that demand cannot sustain - This Bench also in the case of M/S. SHRIRAM EPC LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE CHENNAI [ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and ii. such contract is for the purposes of carrying out, - a) erection, commissioning or installation of plant, machinery, equipment or structures whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators: or b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or c) construction of a new residential complex or a part thereof: or d) completion and finishing services, repair, alteration, renovation restoration of, or similar services, in relation to (b) and (c) or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects; 2.1 It is submitted by the leaned counsel tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST Central Excise, Chennai reported in MANU/CC/0224/2018 was also relied by the Ld. Counsel to support his argument. Ld. Counsel prayed that the appeal may be allowed. 3. Ld. A.R Shri R. Rajaraman appeared on behalf of the Department. The findings in the impugned order was supported by Ld. A.R. In particular, he pointed out para 7 8 of the impugned order passed by the Commissioner (Appeals). 3.1 It is submitted by the Ld. A.R that the Board vide its circular in D.O.F No. 334/1/2007-TRU dated 28.02.2007, has clarified that exemption is available only when the contract is directly obtained from the Government and in case of sub-contract the exemption is not available. It is submitted that appellant is only a sub-contractor and the contract was given to appellant by TWAD Board and not by the Government. Therefore, the demand upheld is legal and proper. It is prayed that the appeal may be dismissed. 4. Heard both sides. 5. From the facts narrated above, it is seen that the appellant has been given a contract by TWAD Board for laying pipelines for drinking water supply project. In page 36 of the appeal paper book the appellant has enclosed letter dt. 17.09.2008 issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 of the mode of execution of taxable services specified in clauses (a) to (d) or is a wholly distinct taxable service and is exigible to Service Tax as an independent species of works contract service? (D) Whether, even if clause (e) in Explanation (ii) of WCS is considered a distinct and independent service, where construction of canals for irrigation purposes and laying of pipelines either as part of lift irrigation systems or for transport and distribution of water is undertaken for Government/Government undertakings, the same is more appropriately covered under clause (b) of WCS, i.e., construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, by applying principles of classification set out in Section 65A(2)(a) (b) and thus fall outside the ambit of levy, since the activity is not primarily for the purpose of commerce or industry; or whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice (ECIS); (b) Issues (B), (C) and (D) : (i) Construction of canals for irrigation or water supply; construction or laying of pipelines/conduits for lift irrigation conceived and integrated into a dam project, must be classified as works contract in respect of dam and is thus excluded from the scope of Works Contract Service defined in Section 65(105)(zzzza) of the Act, in view of the exclusionary clause in the provision; (ii) Turnkey/EPC project contracts, enumerated in clause (e), Explanation (ii) in Section 65(105)(zzzza) of the Act is a descriptive and ex abundant cautela drafting methodology. In the light of the decision in Alstom Projects India Ltd., fortified by the Special Bench decision (dated 19-3-2015) in Larsen Toubro Ltd. reference, a turnkey/EPC contract is taxable prior to 1-6-2007 as well. On and since 1-6-2007, turnkey/EPC contracts must be classified on the basis of the essential character of the service provided thereby, with the aid of classification guidelines set out in Section 65A(2) of the Act. Consequently, a turnkey/EPC contract must be classified under any of the clauses (a) to (d), Explanation (ii), Section 65(105)(zzzza). The bun ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
