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TMI Blog2018 (6) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] - demand for the period prior to 1.6.2007 set aside. Demand for the period after 1.6.2007 upto 30.9.2008 - case of appellant is that the activities / construction were for non- commercial purposes and hence not taxable - Held that:- Works contract service would cover all construction activities whether commercial or non-commercial if such construction activities fall within the definition of Section 65(zzza) of the Finance Act, 1994 - The service tax demand is on the appellant who is a contractor. Further, the ETP cannot be considered as non-commercial one, since the ultimate beneficiary is the dyeing units who are the polluters - the contention that CETP is not installed for commercial purpose and therefore would not fall within Commercial or Industrial Construction Service is not tenable. We also do not find any merit in the argument of the ld. counsel that Board Circular No.80/2004-ST dated 17.9.2004 is in support of the appellant and that construction does not fall within the category of commercial construction - The demand for the period from 1.6.2007 to 30.9.2008 is sustainable Time Limitation - Held that:- Since the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Works Contract Service and is taxable only with effect from 1.6.2007. The adjudicating authority has wrongly rejected the plea of the appellant and confirmed the tax for the period prior to 1.6.2007 also. 2.3 For the demand after 1.6.2007, the ld. counsel submitted that the amount would be only ₹ 21,89,079/- and that construction of effluent treatment plant are not constructions for commercial purposes and therefore not taxable. He explained that Tirupur is an industrial hub of bleaching, dyeing and knitting of garments, mostly exported and contributes heavily to socio economic development of the nation. Noyyal river and its channels, tanks and Orathupalayam dam contribute heavily to the agriculture sector in and around Tirupur. There was constant dispute between the farmers and industrialists because the effluent from the industries polluted the Noyyal River and its channels and tanks. Dispute travelled upto Supreme Court. The Hon ble Supreme Court vide its judgment in Tirupur Dyeing Factory Owners Association Vs. Noyyal River Ayacutdars Protection Association and Others (2009) 9 SCC 737 ordered for compensation to farmers, fixed the time limit for setting up and fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is interpretational, the demand for the normal period from 1.4.2008 to 30.8.2008 for ₹ 5,03,014/ would only survive. 3. The ld. AR Shri A. Cletus supported the findings in the impugned order. He submitted that the ETPs constructed by the appellant cannot be considered as an activity in public interest. Though such ETPs are constructed on the behest of the association formed, it can be said that the said associations are manned by persons like Managing Director etc. of the companies / factories which discharge the effluents. Thus, the ultimate benefit is for the company as their effluents are getting treated and therefore it is definitely commercial construction. Section 65(25b) of Finance Act, 1994 clearly states that a building or civil structure which is primarily for commerce or industry or for work intended for industry would be subject to levy of tax under Commercial or Industrial Construction Service . Although, the said ETPs are constructed as per directions of the Apex Court, since associations are formed to construct the ETP to facilitate the factories to discharge their effluents, the argument of the ld. counsel that these ETP are for public interest and not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams 5.2 One of the contention put forward by the ld. counsel is that the contracts are composite in nature involving both cost of materials supplied as well as charges for services rendered and therefore will fall under Works Contract Services. It is seen that the department has given the benefit of abatement of 67% on the composite contract value. This establishes that the activities fall within the works contract service. Therefore, the period prior to 1.6.2007 cannot be subject to levy of service tax as laid down by the Hon ble Supreme Court in the case of Commissioner of Central Excise Vs. Larsen Toubro Ltd. 2015 (39) STR 913 (SC). 5.3 The period after 1.6.2007 upto 30.9.2008 has been defended by the ld. Counsel mainly putting forward arguments contending that the activities / construction were for non- commercial purposes. It is to be pointed out that when the ld. counsel has put forward the argument contending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effluent as reflected in the consent) at least from 1-8-2006. (emphasis added) 21. The Monitoring Committee vide its memo dated 19-7-2006, submitted the report before the High Court. It also appears from the record that for the purpose of inspection of CETPs the High Court vide order dated 1-8-2005 constituted a Committee consisting of three lawyers, namely Mr T. Mohan, Mr S.Thangavel and Mr.M.M.Sundaresh, making the terms of reference as under : (1) To arrive at time-frame within which RO plants are commenced and completed in consultation with industries, their consultants and suppliers. (2) To consult with the Expert Committee constituted by this Court earlier or any member thereof on what measures required to achieve zero discharge and eliminate pollutants in the effluent through adoption of clean production measures. (3) To monitor the implementation of reverse osmosis plants and related facilities to deal with RO rejects. (4) To inspect the industries, IETPs and CETPs at periodic intervals with or without prior notice and report to this Court on the progress made. The said Committee also submitted the reports from time to time. The High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residential houses, cinema houses and complexes as per the Pollution Control Board norms. Though CETP takes care of effluents not only of the factories, it can be seen that the said treatment plant is used in a major sense for treatment of effluents of commercial establishments, lodge, restaurants etc. The primary use of this construction of CEPT is therefore for commerce, industry. The ld. counsel has placed reliance on the decision in the case of Green Environment Services Co.op Society Ltd. (supra). In the said case, the petitioner society had contested the demand on two grounds (i) on mutuality (ii) that object of the society is in the nature of public interest. In para 9 of the said judgment, it was observed as under:- Having heard the learned counsel for the parties and having regard to the aforesaid aspects, it does appear to the Court that the petitioner-Society has been established with the aid and assistance of the Central Government and the State Government and the petitioner-Society is engaged in the activity of ensuring a safe and cleaner environment by undertaking treatment of industrial effluents and industrial waste materials. This activity for ensuring protec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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