2018 (5) TMI 412 - AT - Service Tax

Demand of service tax - Technical Inspection and Certification Service - third party inspection in respect of projects viz. Ghatprabha, Zambre, Arjuna of the works done by the Civil Wings i.e Statutory Corporations which are part of Water Resources Department - Held that - the issue is no more disputed as in Appellant's own case i.e EXECUTIVE ENGINEER (MECHANICAL) 2014 (3) TMI 734 - CESTAT MUMBAI , where it was held that activity undertaken by the appellant falls outside the purview of service tax, and therefore, the appellant is not liable to pay any service tax - demand of service tax not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the Appellant is liable to pay service tax for rendering "Technical Inspection and Certification Service" through third-party inspection?
- Whether the Appellant's activity of erecting sluice gates in agricultural dams falls under the purview of service tax?

Analysis:
1. The first issue revolves around the Appellant being held liable to pay service tax for providing "Technical Inspection and Certification Service" through third-party inspection. The Appellate Tribunal noted that in a previous case involving the same Appellant, the Tribunal had allowed the appeal, setting a precedent. The Tribunal analyzed the nature of the Appellant's activities and the definition of taxable services. It was established that the Appellant's activities did not fall under the category of taxable services, as clarified by Circular No. 790/09/2004. Consequently, the Tribunal held that the demand for service tax against the Appellant was not sustainable and allowed the appeal, setting aside the impugned order.

2. The second issue pertains to whether the Appellant's activity of erecting sluice gates in agricultural dams is subject to service tax. The Tribunal examined the definition of "erection, commissioning, and installation service" and the criteria for a taxable service provided by a commissioning and installation agency. The Tribunal emphasized that the Appellant, as the Chief Engineer of the Water Resources Department of the Government of Maharashtra, did not undertake activities for anyone other than the government itself. Additionally, the nature of the Appellant's work, involving agricultural dams and sluice gates, was deemed as infrastructural construction rather than falling under the purview of service tax levy. Following a detailed analysis, the Tribunal concluded that the Appellant's activities did not attract service tax, and thus, the appeal was allowed based on the precedent set by a previous Tribunal order.

In conclusion, the Appellate Tribunal CESTAT MUMBAI, in its judgment dated 13/4/2018, addressed the issues of the Appellant's liability for service tax related to technical inspection services and the applicability of service tax to the Appellant's activities of erecting sluice gates in agricultural dams. The Tribunal ruled in favor of the Appellant in both instances, citing precedents and detailed legal analysis to support its decision.