2007 (12) TMI 135 - AT - Service Tax

Electrical Contractors - whether activity laying of pipe in wall/floor for crossing of wires, fixing the junction box & digging the earth to lay the cables etc.amounts to erection of plant & machinery or equipment electrical work can t be considered as civil work it not come in purview of clause 39a F.Act- only w.e.f. 16.06.05, installation of electrical devices i.e. wiring or fittings was included in definition of erection, commissioning or installation u/c 39a service tax not payable

Summary

Issues:
Whether the activities of the Electrical Contractors amount to erection of plant & machinery or equipment for service tax liability under clause 39a of the Finance Act, 2004.

Analysis:
The judgment revolves around the interpretation of whether the activities undertaken by the appellants, who are Electrical Contractors, fall under the purview of erection of plant & machinery or equipment for the purpose of service tax liability. The Commissioner (Appeals) considered the activities to be in the nature of civil work and covered under erection. However, the Vice-President disagreed, noting that the work carried out is primarily electrical in nature, involving activities such as laying pipes, fixing junction boxes, and digging earth for cable installation. The judgment highlights that the definition of erection, commissioning, or installation under clause 39a of the Finance Act, 2004, did not explicitly cover electrical work during the relevant period. It is emphasized that only from June 16, 2005, installation of electrical devices was included in the definition.

The Vice-President concluded that the appellants are not liable to pay Service Tax as they did not erect, commission, or install any plant & machinery or equipment during the relevant period. Therefore, the impugned order levying Service Tax was set aside, and the appeal was allowed. The judgment clarifies the distinction between civil work and electrical work in the context of service tax liability, emphasizing the specific activities carried out by the appellants and the legislative framework in place during the relevant period. The decision provides a nuanced interpretation of the law and its application to the factual circumstances of the case, ultimately resulting in the exoneration of the appellants from the service tax liability based on the nature of their work.