2018 (9) TMI 384 - AT - Service Tax

Erection, Commissioning or Installation Services - appellant carried out the work of providing and erecting Fire Hydrant System for Krishi Upaj Mandi, Kukshi, District Dhar (M.P.) - abatement under N/N. 1/2006-ST dated 01.03.2006 - Held that - The activity involves supply of Fire Hydrant System as well as Erection, installation of the same for Krishi Upaj Mandi. This nature of activity is squarely covered under the category of erection and commission service - the demand of Service Tax upheld with the grant of abatement - appeal dismissed - decided against appellant.

Summary

Issues:
1. Classification of services provided by the appellant under Service Tax regulations.

Analysis:
The case involved an appeal against the Order-in-Appeal regarding the liability of the appellant to pay Service Tax for providing and erecting a 'Fire Hydrant System.' The Department contended that the activity fell under the category of 'Erection, Commissioning or Installation Services' (ECIS) and issued a show cause notice. Both lower authorities found the activity liable for Service Tax, ordering payment of ?80,052 along with interest and penalties. The appellant argued that the activity should be classified under 'Works Contract Service' due to the supply of material involved. However, the Revenue justified the order for payment under ECIS, as the 'Works Contract Service' classification was not raised earlier.

Upon hearing both parties and reviewing the records, the Tribunal determined that the activity encompassed supplying and installing the 'Fire Hydrant System,' falling within the scope of 'erection and commission service.' Consequently, the Tribunal upheld the demand for Service Tax while granting the benefit of abatement. The decision was made to sustain the impugned order and reject the appeal.

This judgment clarifies the classification of services provided by the appellant, emphasizing the distinction between 'Works Contract Service' and 'Erection, Commissioning or Installation Services' under the Service Tax regime. The Tribunal's analysis focused on the nature of the activity involving both supply and installation aspects, leading to the conclusion that it aligned more closely with 'erection and commission service,' justifying the demand for Service Tax under that category.