2017 (8) TMI 599 - AT - Service Tax

Erection commission and installation Services - appellants are carrying out erection of gates with Govadari Marathwada Irrigation Development Corporation - departments case is that the erection of gate is the taxable service of erection commission and installation which is liable to service tax - Held that - similar issue decided in the appellant own case THE EXECUTIVE ENGINEER (MECHANICAL) WATER RESOURCES DEPARTMENT Versus COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX, NASIK 2014 (3) TMI 734 - CESTAT MUMBAI , where it was held that The Chief Engineer, Water Resources Department of the Government of Maharashtra is not a commissioning and installation agency as they do not undertake these activities for anybody else except themselves - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the erection of gates by the appellant for a government corporation is a taxable service liable to service tax.

Analysis:
The case involved the appellant, an Executive Engineer in the Mechanical Wing of the Water Resource Department, Government of Maharashtra, engaged in the manufacturing and erection of various gates for dams. The department contended that the erection of gates constituted a taxable service of erection commission and installation, subject to service tax. Show-cause notices were issued, leading to confirmed demands, interest, and penalties. The appellant argued that since the service was provided to various government corporations under the Government of Maharashtra, no distinct service provider-service recipient relationship existed, as both entities fell under the same governmental umbrella. The appellant cited a previous Tribunal decision and an Allahabad High Court judgment to support their position.

The Tribunal carefully considered the submissions from both sides and referenced a previous order in the appellant's own case, where a similar issue was addressed. The previous order highlighted that the appellant, as the Chief Engineer of the Water Resources Department, undertook the erection of gates for dams constructed by government corporations. It was argued that since the appellant was not a commissioning and installation agency under the relevant law and was providing services only to the Government of Maharashtra, the activity did not constitute taxable service. The Tribunal analyzed the definitions under the law related to erection, commissioning, and installation services, emphasizing that the appellant's activities did not fall within the scope of taxable service as they were not rendering services to entities outside the government. The Tribunal concluded that the appellant's activities were excluded from the purview of service tax levy, as they pertained to infrastructural construction for agricultural purposes, rather than commercial or industrial services.

Based on the precedent set in the appellant's previous case, the Tribunal ruled in favor of the appellant, stating that the issue in the present case was covered by the previous judgment both factually and legally. Consequently, all appeals were allowed, and the appellant was deemed not liable to pay any service tax.