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TMI Blog2021 (2) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... contractors take services from various sub contractor. The issue before us is if the appellants are entitled to take the credit of service tax paid by these contractors directly supplying services to the appellant for the purpose of laying pipeline. The fundamental objection of the revenue is that pipelines are immovable property and not goods and therefore, any service tax paid on such installation cannot be claimed as input credit by the appellant. It is seen that the issue involved in the instant case is squarely covered by the decision of tribunal in the appellant s own case GUJARAT STATE PETRONET LTD. VERSUS COMMR. OF C. EX. S.T., AHMEDABAD [ 2013 (9) TMI 1171 - CESTAT AHMEDABAD] . The said decision was also approved by Hon ble High Court. The Learned Special Counsel for revenue has argued since the Hon ble Apex Court has issued notice, the decisions of tribunal and Hon ble High Court cannot be applied to the instant case - there are no force in this submission as the decision of Hon ble High Court has not been stayed. The second issue raised by the Learned Special Counsel is that tribunal solely relied on the decision of AP High Court in the case of COMMR. OF C. EX., VIS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to claim input service tax credit of the Service Tax charged by its EPC contractors (who were appointed directly by the Appellant) in connection with construction of the pipeline where such Service Tax was being paid by the Appellant to such EPC contractors? 2.3 Learned Counsel pointed out that the precise issue under consideration in this appeal has already been decided in favour of the Appellant in two decisions of the Tribunal including one in their own case. He argued that the issue being covered by the decisions of the Hon ble Tribunal, the Appellant seeks that the ratio laid down in these decisions be applied in the present Appeal as well: (i) Decision in the Appellant s own case for the period June 2005 to March 2009 (GSPL vs CCE, Order no. 10474-10477/WZB/AHMD/2013 dated 15.04.2013 read with ROM Order dated 18.09.2013). This decision of the Tribunal in the appellant s case was taken in appeal by revenue to the Hon ble Gujarat High Court, but has not been stayed till date. He pointed out that the Hon ble High Court, having admitted the appeal, has not granted stay in favour of the Revenue and as such therefore, the favourable decision of the Tribunal on the aspect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case, the input services received from the EPC Contractors in respect of laying of gas transmission pipelines are utilised by the Appellant to render taxable output service pertaining to Transport of goods through pipeline or other conduit service . Without the pipelines, it would not be possible for the Appellant to render the Transport of goods through pipeline or other conduit service - a fact that has not been disputed even in the SCNs. (ii) He argued that the output services of GSPL cannot be performed in absence of the pipeline. The pipeline would never come into existence unless the same is constructed using the constructed services of the EPC contractors. (iii) He argued that the phrase used in the CENVAT credit Rules vis-a-vis credit availment of input service for output service providers like the Appellant is used... for providing an output services . This phrase (i.e. used for ) has not been defined or explained under the Act. However, Tribunal in Navratna S.G. Highway vs CST, Ahmedabad, 2012 (28) STR 166 (Tri-Ahmd.) held that the term inputs and input services are parimateria in so far as service providers are concerned as they both use the phrase u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice provider. In the present case, the input services of the EPC contractors are used in relation to setting up of premises of GSPL (since the entire route of the pipeline constitute the premises of the GSPL) and hence specifically covered under the inclusive part of the definition as well. The entire route of pipeline would qualify as a premise of GSPL even if it is laid beneath the earth- for support of this argument reliance is placed on the Supreme Court decision of Anant Mills Co Ltd. vs State of Gujarat, AI 1975 SC 1234. He argued that the track of land on which the pipeline is constructed and placed, a statutory right to use has been vested free from all encumbrance to the Appellant under the Gujarat Water and Gas Pipelines (Acquisition of Right of user in Land) Act, 2000 which therefore makes it a premises, for it is this entire route from where/through where, the pipeline services are being rendered. 2.10 Learned counsel argued that the fact that pipeline is an immovable property holds no relevance for CENVAT Credit. He argued that Rule 3(1) of the CCR only states that the credit would be available on the input services received by the output service provider and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that the judgment relied upon by the Hon ble High Courts and the Hon ble Tribunal is the one rendered by the Hon ble AP High Court in the case of Sai Samhita Storages (P) Ltd. The period involved in this judgment was 4/2005 to 9/2005 and the case related to cement and steel items, such as TMT bars, which were used for construction of storage tanks, reinforcement of storage tanks and construction of pipelines for transfer of liquid cargo from the tanks to trucks. These goods were used for setting up the premises of provider of output service, in this case, a storage facility to provide Storage and warehouse service as defined in Section 65 (102) of FA, 1974.He argued that it is settled law that the ratio of judgment is the authority in relation to the facts of the case and the issues considered. The issue in Sai Samhita case concerned input services . He argued that as per the definitions, the means clause pertaining to inputs and inputs services are different. In other words, as far as cement and steel items were concerned their use in any service entitled them to avail the duty credit in respect of the said items. The dispute therein did not concern input service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with this submission. It cannot be said that in respect of input services received by the contractors, appellant is eligible since those are not input services used for providing output service by the appellant but they are used for providing output service by the EPC contractors. 5.3 As regards the service rendered by the EPC contractors the ground canvassed is that what has emerged is an immovable property which is neither a service nor goods. In this case, it has to be noted that EPC contractors have not paid service tax on pipeline system but on the services provided for constructing the system. Definition of input service clearly covers this and it cannot be said that this service is not provided to output service. Moreover the decision of Hon ble Andhra Pradesh High Court in the case of Sai Sahmita Storages P) Ltd. [2011(270) E.L.T. 33 (A.P.) = 2011(23) S.T.R. 341 (A.P.)] also supports the case of appellants. In this case it was held that inputs used for construction of warehouse is admissible as credit. The ROM Order amended the paragraph 5.2 above as follows: The learned Special Counsel also submitted that in respect of services, rendered to the contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the business of transporting gas through pipe line. For the purpose of transporting gas through pipe line it is essential for them to lay pipe lines between their different station. For the purpose of laying pipeline the appellants engage various contractors to procure pipes and completed the activity of laying the pipeline. In this process these contractors get the price of material used by them and all the services provided by them. These contractors pay service tax on the services provided by them to the appellant. These contractors take services from various sub contractor. The issue before us is if the appellants are entitled to take the credit of service tax paid by these contractors directly supplying services to the appellant for the purpose of laying pipeline. The fundamental objection of the revenue is that pipelines are immovable property and not goods and therefore, any service tax paid on such installation cannot be claimed as input credit by the appellant. All the issues involved in this case have already been decided in the appellant s own case by the Tribunal vide order reported in 2013 (32) STR 510 (Tri. Ahmedabad). The said order was subsequently modified by or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not able to find any provision which allows them to take credit of duty paid on pipes and also service tax paid on construction of pipeline system. A conscious decision was made by the appellant and the EPC contractor to avail the benefit of Notification No. 12/2003 especially in the case of appellants, they had also taken a legal opinion. Once a choice is made the consequence of the choice also inevitably follows and has to be suffered. 5. Whether GSPL is eligible for the credit in respect of input services provided by other contractors to EPC contractors? 5.1 The main ground taken by the Revenue to deny this benefit is that what GSPL used to perform its services is an immovable property and hence it is not goods as understood under the Central Excise Act. According to Revenue the subject goods is neither an input nor input service nor capital goods. According to the learned Special Counsel the pipeline system used by GSPL does not fall within the definition of any item under Rule 2 of CCR. 5.2 The learned Special Counsel also submitted that in respect of services rendered to the contractor by other service providers, Notification No. 12/2003 does not disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (34) STR 321. Against this order of Hon ble High Court the revenue has approached Hon ble Apex court. Hon ble Apex Court has after condoning the delay issue the notice in the petition for special leave to appeal filed by revenue. 5. It is seen that the issue involved in the instant case is squarely covered by the decision of tribunal in the appellant s own case. The said decision was also approved by Hon ble High Court. The Learned Special Counsel for revenue has argued since the Hon ble Apex Court has issued notice, the decisions of tribunal and Hon ble High Court cannot be applied to the instant case. We find no force in this submission as the decision of Hon ble High Court has not been stayed. The second issue raised by the Learned Special Counsel is that tribunal solely relied on the decision of AP High Court in the case of Sai Samhita Storages Pvt Ltd-2011 (23) STR 341 (AP), and that the decision in the case of Sai Samhita Storages Pvt Ltd relates to inputs and not inputs services , We do not find any merit in argument of Learned Special Counsel. The decision of tribunal upheld by Hon ble High Court in Appellant s own case is comprehensive in all respects. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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