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2015 (10) TMI 1854 - AT - Service TaxLiability 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. Painting of properties belonging to railways is excluded from definition of Commercial or Industrial Construction Service and the term railways does not include services provided i.r.o roads, airports, railways, transport terminals, bridges, tunnels and dams; thus not liable to service tax. Painting of bus stand gets excluded from service tax as it gets covered under transport terminals excluded from the scope of service tax. Painting of plant and machinery of NTPS is an activity 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 dismissed Decided in favour of Assessee.
Issues:
1. Appeal against demand of duty, interest, and penalties under various sections. 2. Classification of services provided by the appellant under Commercial or Industrial Construction Service and Construction of Complex Service. 3. Interpretation of relevant legal provisions and circulars. 4. Application of case law precedents to the current case. 5. Natural justice principles regarding classification change without notice. Analysis: 1. The appeal was filed against the demand of duty, interest, and penalties imposed by the Commissioner of Central Excise & Customs (Appeals), Nashik. The demand was confirmed for the appellant's provision of "Completion and Finishing Services" under Commercial or Industrial Construction Service and Construction of Complex Service. 2. The appellant argued that the services provided, including painting of residential quarters, properties of railways, State Transport Bus Stand, and laying of sewerage pipeline, did not fall under the categories subject to service tax. The Tribunal analyzed each activity separately: - Painting of residential quarters: Not covered under Construction of Complex Service as the quarters were for the employees' personal use, exempt from service tax. - Painting of railways properties and bus stand: Excluded from service tax under Commercial or Industrial Construction Service as they are considered part of transport terminals. - Painting of plant and machinery of NTPS: Not liable for service tax as NTPS is not strictly for commercial purposes, as per Board's Circular. - Laying of underground sewerage pipeline: Not taxable as it is for civic amenities, following the spirit of the Board's Circular. 3. The Tribunal disagreed with the Commissioner (Appeals) on the interpretation of legal provisions and circulars, emphasizing a holistic approach to determine tax liability. Case law precedents were cited to support the appellant's contentions. 4. Regarding the change in classification without notice, the Tribunal found it against the principles of natural justice. The appellant was not given the opportunity to address the change from "commercial and industrial construction service" to "erection, commissioning, or installation service." 5. Ultimately, the Tribunal set aside the demand for service tax and related penalties, allowing the appeal with consequential relief. The impugned order was overturned, and the appellant was granted relief based on the detailed analysis and legal interpretations provided. This comprehensive analysis of the judgment highlights the issues, arguments, legal interpretations, and the final decision rendered by the Appellate Tribunal CESTAT MUMBAI in the cited case.
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