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TMI Blog2020 (2) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... under the said head has been raised by revenue. No charge for classification of the serviced provided by the appellant under the head of Works Contract or Commercial or Industrial Construction Service has been made against the appellant. In these circumstances we are unable to uphold the demand raised against the appellant in respect of activities relating to laying of pipelines for Surat Municipal Corporation, Gujarat Water Supply and Sewerage Board ( GWSSB), Canal Division, NHAI And M/s. Surat Urban Development Authority. The revenue has also argued that in some cases the appellant have acted as sub-contractor and not as main contractor. We find that the said argument is of no use as the demand has been raised solely under the category of ECIS The specific clarity of charge has been made to levy Service Tax under the category of Business Auxiliary Service and no prejudice is caused to the appellant on account of this the demand under the head of Business Auxiliary Service is confirmed. The interest and penalty in respect of Business Auxiliary Service is also upheld. The demand of duty, interest and penalties in respect of demand under ECIS category is set aside. Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er/sewerage and associated works like digging of the earth, supporting pipeline/conduit, construction of pumping station together with associated machinery and other construction works cannot be classified under ECIS. He argued that the said decision classified such services under Commercial or Industrial Construction Service for the period up to 01.06.2007 but after that period it is not liable to Service Tax. He also pointed out that the said decision of Larger Bench was followed by tribunal in case of SHONAN SIDDHART (J.V) VS CCE 2017 (51) STR 64 (Tri.- Mumbai). 2.2 Learned Counsel pointed out that while the demand has been raised under the head of ECIS and the activity cannot be classified under the head of ECIS. In these circumstances no demand can be sustained under any other head of service. He also relied on the decision of tribunal in case of REAL VALUE PROMOTERS PVT. LTD. VS COMMISSIONER OF GST CENTRAL EXCISE 2018- TOIL-2867-CESTAT-MAD. He argued that the tribunal in case of CONCEPT MOTORS PVT. LTD. vide Order no. A/11717/2018 dated 07.08.2018 held that the service tax demand raised under wrong classification cannot be sustained. He argued that in the present case th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative further pointed out the services provided by them was not to SMC or GWSSB in all cases but was to other contractors who were in turn providing services to GWSSB, SMC Surat Urban Development Authority. Learned Authorized Representative pointed out that the activity done by them is squarely covered under the definition of ECIS. He pointed out that the definition of ECIS at the material time reads as follows: Erection, Commissioning or Installation means any service provided by a commissioning and installation agency, in relation to,- (i) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise or (ii) installation of- (a) electrical and electronic devices, including wirings or fittings therefor; or (b) plumbing, drain laying or other installations for transport of fluids; or (c) heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work; or (d) thermal insulation, sound insulation, fire proofing or water proofing; or (e) lift and escalator, fire escape staircases or travelators; or (f) such other similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , CI/GI pipes and jointing materials into the trench; laying to proper grade and alignment; refilling the trenches with excavated soil after laying of pipes, construction of sluice valve pits, scour valve pits, air valve pits, thrust blocks, etc. 8.1 We find ourselves in agreement with the appellants reading of the expressions contained in the relevant entry, namely, erection, commissioning or installation . We find it elementary that erection connotes construction or building of a structure and laying of pipeline does not involve erection. We find no ambiguity in the expression installation. It applies to machinery already made which are formally made ready to operate at the site. Installation implies setting up the machinery ready for use, like giving power connections or installing driver software in the case of a machine ran with the aid computer software. Commissioning involves the operationalisation of the machinery after which it starts functioning regularly. In laying of long distance pipeline, earth is dug and pipes laid and jointed, and the pipes pass through sumps with boosters at intervals, if necessary. This activity will not involve erection. 8.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order demanding duty on the activity of laying of pipeline interpreting it to be erection, commissioning and installation of a plant is totally misconceived and unacceptable. 5.2 While affirming the decision of tribunal in case of INDIAN HUME PIPE(supra), the Hon ble High Court of Madras relied on the decision of Larger Bench of tribunal in case of LANCO INFRATECH LTD. 2015 (38) S.T.R.709 (Tri.-LB). Hon ble High Court observed as follows: 10. On the question as to what happens if the case is covered by Section 65(25b), a larger Bench of the Customs, Excise and Service Tax has already held in Lanco Infratech Ltd. v. Commissioner of Customs, Central Excise and Service Tax, Hyderabad [2015 TIOL-768-CESTAT-BANG-LB = 2015 (38) S.T.R. 709 (Tri. - Bang)] as follows : Considered in the light of the precedents referred to herein above; the definitions of ECIS and CICS; the Board clarification dated 7-1-2010; the Dictionary meanings ascribed to the word conduit ; and provisions of Section 65A(2)(a) and (b), we conclude that construction of a pipeline/conduit for transmission of water/sewerage and involving associated works like digging of the earth, supporting pipeline/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said head can be raised against the appellant. 6. The second part of the dispute relates to service tax under the category of Business Auxiliary Service. A demand of ₹ 1,23,856 has been sustained in respect of sales commission received by the appellant from M/s. Electrosteel Castings Ltd., M/s. Lanco Industries Ltd., and M/s. Pacific Pipe Systems Pvt. Ltd. It has been argued by the appellant that the specific sub-clause of the Business Auxiliary Service under which tax is sought to be demanded has not been identified. He placed reliance on the decision of tribunal in case of SWAPNIL ASNODKAR (supra). We find that in Para 6.1 of the Show Cause Notice in the said para after identifying the amount received as the sales commission following has been expressly stated. It also reveals from the details submitted by M/s. Electrosteel Castings Ltd., Ahmedabad that they have given work to M/s. Shree Hindustan to act as their sales commissioner agent for pipes. The said work of commissioner agent fails in the Business Auxiliary Services. M/s. Electrosteel Castings Ltd., Ahmedabad has paid ₹ 5,29,110/- to M/s. Shree Hindustan against the services provided to them which i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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