2019 (3) TMI 1818 - AT - Service Tax

Works Contract - service of laying pipelines for various authorities - services of laying pipelines to various Government organisations for lift irrigation purposes or for construction of canal etc. Laying of pipelines provided to Municipal Corporations of the State Governments for transportation of the drinking water etc. - HELD THAT - The said issue also stands decided in the case of DINESH CHANDRA AGARWAL INFRACON PVT LTD VERSUS CCE, AHMEDABAD 2010 (8) TMI 54 - CESTAT, AHMEDABAD and confirmed by the Hon ble High Court and has been followed by the Tribunal in number of decisions. It stands held that such an activity is not taxable. Laying of pipelines for M/s. RICCO, a State Government Industrial Organisation - HELD THAT - Ld. AR appearing for the Revenue submits that the Larger Bench decision of the Tribunal was not available at the time of passing of the impugned order and as such Adjudicating Authority did not have the benefit of examination and applicability of the same to the facts of the present case. As such he prays that the matter may be remanded to the Adjudicating Authority for fresh decision in the light of the law declared by the Tribunal in various decisions. Inasmuch as a part of the demand is required to upheld and the same needs re-quantification, we deem it fit to set aside the impugned order and remand the entire matter to the Adjudicating Authority for fresh decision - Appeal allowed by way of remand.

Summary

Issues: Taxability of services of laying pipelines for various authorities under the category of 'Works Contract'.

In this judgment by the Appellate Tribunal CESTAT NEW DELHI, the issue involved was the taxability of services provided by the appellants, engaged in the manufacture of pipelines, for laying pipelines for various authorities. The lower Adjudicating Authority had taxed these services under the category of 'Works Contract'. The appellants argued that a similar issue had been decided in their favor by the Larger Bench of the Tribunal in a previous case. The Tribunal noted that a part of the demand was related to laying pipelines for Municipal Corporations of State Governments for purposes like transportation of drinking water, which had been held as not taxable in previous decisions. Another part of the demand was for laying pipelines for a State Government Industrial Organization, which the appellants agreed was taxable and had been paying Service Tax on. However, the appellants acknowledged instances where they had not discharged the tax liability on such activities. The Revenue argued that the Adjudicating Authority did not have the benefit of the Larger Bench decision at the time of passing the impugned order and requested a remand for fresh decision based on the law declared by the Tribunal in various decisions.

The Tribunal, after considering the arguments, held that a part of the demand needed to be upheld and re-quantified. Therefore, the impugned order was set aside, and the matter was remanded to the Adjudicating Authority for a fresh decision in light of various judgments of the Tribunal, which had also been upheld by the High Courts. The appeal was allowed by way of remand, ensuring that the appellant would have the opportunity to present their case and refer to relevant decisions during the fresh proceedings.