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TMI Blog2018 (11) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... nder works contract service - demand do not sustain - appeal allowed - decided in favor of appellant. - Appeal Nos. ST/410/2011 and ST/41631 to 41633/2014 - Final Order Nos. 42412-42415/2018 - Dated:- 14-9-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri N. Viswanathan, Advocate for the Appellant Shri A. Cletus, Addl. Commissioner (AR) for the Respondent ORDER Per Bench Brief facts are that the appellants are engaged in supply, erection and commissioning of sewage treatment plant, PVC pipe line for water supply projects to Water and Sewage Board. They obtained service tax registration for various services. In the course of audit of accounts, it was notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service with effect from 1.6.2007. However, such services are provided in respect of non-commercial activities to the Government / Municipal bodies and therefore would fall under the exclusion clause of clause (b) of Section 65(105)(zzzza) of Finance Act, 1994 and therefore the said services are not subject to levy of service tax. The Commissioner in the said order for the period from 1.4.2008 to 31.3.2009 has confirmed the demand and refused to apply the decision in Lanco Infratech Ltd. 2014 (34) STR 384 (Tri. Bang.) stating that the said decision was only an interim order. However, later the Larger Bench of the Tribunal in the case of Lanco Infratech Ltd. Vs. Commissioner of Central Excise 2015 (38) STR 709 has categorically held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside the demand in respect of erection and commissioning for services rendered for water treatment plant, sewage treatment plant and sewage works. 3. The ld. AR Shri A. Cletus supported the findings in the impugned order. He adverted to the definition of works contract in section 65(105)(zzzza) and argued that the explanation clarifies the meaning of works contract. As per sub-clause (b) of the said explanation, only a pipe line or conduit which is not used primarily for the purpose of commerce or industry would fall out of the definition of works contract. In the present case, the appellants have undertaken the works of not only laying of pipelines or conduit but also construction of sewage treatment plant, water treatment plant e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnkey projects are only in the nature of contract which takes in all the works of design, engineering, procurement etc. In Lanco Infratech Ltd. (supra), the Larger Bench of the Tribunal had analyzed the issue and held that as under:- 19. On the aforesaid analyses we hold [on issues (A), (B) (C)] that construction of canals under a dam for transmission of water or sewerage; or construction of pipelines or conduits for conveyance of water for irrigation, domestic consumption or sewerage disposal even where executed as turnkey/EPC contracts; (i) would be classifiable under clause (b), Explanation (ii) of Section 65(105)(zzzza); (ii) construction of canals, pipelines or conduits for Government/Government undertakings for augmentation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (supra) as well as Indian Hume Pipe Co. Ltd. (supra) and held that such constructions are not subject to levy of service tax under works contract service. It is pertinent to note that in the above decision, the service tax demand was confirmed only in respect of erection and commissioning of service station (electrical) for supply of water under JNNURM Scheme. The demands in respect of construction of water treatment plant and sewage treatment plant were set aside. The relevant portion reads as under:- 2. The brief facts as per the show cause notice dated 18-10-2012 for the period under dispute 2007-08 to 31st March, 2011, are that the appellant is registered under the provisions of service tax for construction and engineering serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlal Lal Nehru National Urban Renewal Mission Scheme, it is evident from the copy of the contract that out of the gross amount, only ₹ 3,25,200/- is attributable to erection/Labour part. The balance is attributable to supply of items/materials. Thus, at best service tax is only leviable on this amount of ₹ 3,25,200/-. The learned counsel also states that it is admitted fact that all the transactions were found duly recorded by Revenue in the books of accounts maintained in the ordinary course of business. Further in view of the confusion prevailing regarding classification/exemption, and the issue being finally referred to and settled by the Larger Bench of this Tribunal, the issue is wholly interpretational and the extended pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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