9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 1100 - AT - Service TaxServices of laying pipelines and conduits - whether works contract or not - the appellant assessee had pleaded that the works of laying of pipelines for sewage etc. are not for commerce and trade and as such the same is exempted from service tax in terms of provisions of Explanation of Section 65 (105)(zzzza) of the Finance Act, 1994 - Held that - the issue now stands settled by the Larger Bench of this Tribunal in M/s Lanco Infratech Ltd. 2015 (5) TMI 37 - CESTAT BANGALORE (LB) wherein it has been held that such works executed by the appellant in the nature of sewerage works, laying of pipe and for water supply falling under Explanation (ii) (b) fall under the definition of works contract service and were also exempted under the classification commercial and industrial construction service prior to 1/6/2007 - demand set aside. Extended period of limitation - Held that - the issue is wholly interpretational and thus the longer period of limitation is not invokable under the facts and circumstances. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Classification of services related to the construction of sewage pumping stations, water treatment plants, sewage treatment plants, and sewage works. 2. Applicability of service tax on the laying of pipelines for sewage and water supply. 3. Taxability of services under various classifications such as ECIS, CICS, and WCS. 4. Interpretation of the exclusionary clause in Section 65(105)(zzzza) of the Finance Act, 1994. 5. Validity of service tax levy on subcontracted works. 6. Applicability of the extended period of limitation. Detailed Analysis: Issue 1: Classification of Services The appellant was engaged in the construction of civil structures, including pipelines for sewage and water supply. The Revenue contended that these services were taxable under "works contract service" as defined in Section 65(105)(zzzza) of the Finance Act, 1994. The appellant argued that these works were not for commerce or trade and thus exempt from service tax. Issue 2: Applicability of Service Tax The show cause notice demanded service tax for various works, including sewer works, laying pipelines for water supply, and execution of a sub-station for water supply under the JANURM Scheme. The appellant contested this, citing the Larger Bench decision in Lanco Infratech Ltd., which held that such works executed for Government or Government undertakings for non-commercial purposes were not taxable. Issue 3: Taxability under ECIS, CICS, and WCS The Larger Bench in Lanco Infratech Ltd. framed issues to determine whether such activities should be classified under ECIS, CICS, or WCS. It concluded that the construction of pipelines and conduits for water and sewerage projects for Government undertakings were classifiable under CICS and not exigible to service tax as they were for non-commercial purposes. Issue 4: Exclusionary Clause Interpretation The Tribunal, referring to the Larger Bench decision, held that the construction of pipelines or conduits for Government projects related to water supply or sewerage disposal was excluded from service tax under the exclusionary clause in Section 65(105)(zzzza). This exclusion applied to activities not primarily for commercial or industrial purposes. Issue 5: Subcontracted Works The Larger Bench also addressed the issue of subcontracted works, stating that in the absence of any transfer of property in goods from the main contractor to the Government, the levy of service tax on the main contractor was not valid. Issue 6: Extended Period of Limitation The Tribunal found that the issue was interpretational, given the confusion and subsequent clarification by the Larger Bench. Therefore, the extended period of limitation was not invokable. The demand for the normal period was allowed only for the gross amount of ?3,25,200/- attributable to labor charges for the erection of a service station. Conclusion: The Tribunal allowed the appeal, setting aside the impugned order except for the normal period demand related to the erection of the service station. The appellant was entitled to consequential benefits in accordance with the law. The judgment confirmed that such works executed for Government undertakings for non-commercial purposes were not exigible to service tax, aligning with the Larger Bench decision and the Hon'ble Madras High Court's ruling in Indian Hume Pipes Ltd.
|
