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TMI Blog2018 (10) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... ipal contractor, in terms of the agreement with the employer/ contractee, assigns the works to a sub-contractor and the transfer of property in goods involved in the execution of such works passes on accretion to or incorporation into the works on the property belonging to the employer/ contractee, the principal contractor cannot be considered to have provided the taxable (works contract) service enumerated and defined in Section 65(105)(zzzza) of the Act. Also, prior to 01.06.2007 the demand on the appellant cannot be sustained in view of the judgment of the Apex Court in the case of Larsen & Tourbo Ltd., [2015 (8) TMI 749 - SUPREME COURT] as it is the fact that contracts which are awarded to the appellant are for erection & commissioning of various irrigation projects. That would mean that the entire contract is a works contract. Appeal allowed - decided in favor of appellant. - Appeal No. ST/1321/2010 - A/31113/2018 - Dated:- 20-8-2018 - Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL) Shri P. Venkata Prasad, Chartered Accountant for the Appellant. Shri Guna Ranjan, Superintendent (AR) for the Respondent. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice is sought to be taxed under erection commissioning and installation services hence it cannot be taxed as Larger Bench of Tribunal in the case of Lanco Infratech Limited Vs. CCE, Hyderabad [2015 (38) STR 709 (Tri-LB)] held so. He draws our attention to the said judgments. After the Larger Bench the Tribunal in the case of Shonan Siddhart (J.V) Vs. CCE [2017 (51) STR 64] on similar set of facts held that providing in laying of pipeline for irrigation scheme cannot be taxed under erection commissioning or installation services. 4. Learned Departmental Representative reiterates the findings of the lower authorities. 5. On careful consideration of submissions made by both sides and on perusal of records, it is noticed that the Adjudicating Authority in the impugned order has specifically recorded that the issue is whether during the period in question, the activities under taken by the appellant would get covered under erection commissioning and installation services or otherwise. He has held so by reading the contract entered by the appellant for APSIDCL which according to him are for supply of erection commissioning of various irrigation schemes. 6. Since, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction or commissioning (EPC) projects specified in clause (e) is merely an enumeration of the mode of execution of taxable services specified in clauses (a) to (d) or is a wholly distinct taxable service and is exigible to Service Tax as an independent species of works contract service? (D) Whether, even if clause (e) in Explanation (ii) of WCS is considered a distinct and independent service, where construction of canals for irrigation purposes and laying of pipelines either as part of lift irrigation systems or for transport and distribution of water is undertaken for Government/Government undertakings, the same is more appropriately covered under clause (b) of WCS, i.e., construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, by applying principles of classification set out in Section 65A(2)(a) (b) and thus fall outside the ambit of levy, since the activity is not primarily for the purpose of commerce or industry; or whether a contrary view that clause (e) being an independent entry, activities falling thereunder would be taxable even if the rendition of service thereby or thereunder, was not primarily for non-commercial or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues (B), (C) and (D) : (i) Construction of canals for irrigation or water supply; construction or laying of pipelines/conduits for lift irrigation conceived and integrated into a dam project, must be classified as works contract in respect of dam and is thus excluded from the scope of Works Contract Service defined in Section 65(105)(zzzza) of the Act, in view of the exclusionary clause in the provision; (ii) Turnkey/EPC project contracts, enumerated in clause (e), Explanation (ii) in Section 65(105)(zzzza) of the Act is a descriptive and ex abundant cautela drafting methodology. In the light of the decision in Alstom Projects India Ltd., fortified by the Special Bench decision (dated 19-3-2015) in Larsen Toubro Ltd. reference, a turnkey/EPC contract is taxable prior to 1-6-2007 as well. On and since 1-6-2007, turnkey/EPC contracts must be classified on the basis of the essential character of the service provided thereby, with the aid of classification guidelines set out in Section 65A(2) of the Act. Consequently, a turnkey/EPC contract must be classified under any of the clauses (a) to (d), Explanation (ii), Section 65(105)(zzzza). The bundled bouquet of services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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