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TMI Blog2008 (7) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ioning/installation of the pipelines and related structures was undertaken in respect of plants and was liable to service tax. As there was no evidence that some other contractor had paid service tax on the bills raised by the assessee, the Commissioner demanded service tax of Rs. 1,78,23,890/- (including education cess), interest due thereon under Section 75 of the Act, imposed penalties @ 20% per month/Rs. 200 per day till the date of payment of tax under Section 76 of the Act, penalty of Rs. 1000/- under Section 77 of the Act and penalty of Rs. 1,78,23,890/- on IHPL under Section 78 of the Act. 2. The instant appeal challenges the above order. It is submitted that the notice did not specify the activity sought to be taxed under the entry 'erection, installation or commissioning service'. During 1.7.03 to 30.09.06, definition of installation or commissioning agency had undergone several changes. From 1.7.03 to 16.6.05 Levy on 'commissioning or installation' service was effective from 1.7.03. Installation or commissioning service was defined under Section 65 (105) (zzd) of the Act as any service provided to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The equipments mentioned in the Board's Circular could be installed as such. The Commissioner failed to appreciate the distinction. From 10.09.04 to 15.06.05 'Erection' service was added to the existing services of 'installation and commissioning' with effect from 10.09.04. As per Concise Oxford Dictionary erection meant the act of erecting, and erect meant construct (a building, wall, etc.). As per Cambridge International Dictionary of English 'erection is the act of making or building a structure'. Erection was an activity which preceded installation and commissioning of a plant, machinery or equipment. Installation of an equipment or machinery was undertaken on a pre-existing machine. Erection was the act of bringing into existence a plant, equipment or machinery. In other words, activity of erection gave birth to an immovable plant. In 2004 budget, the scope of service tax under installation and commissioning was extended to erection also. Erection involved civil works, which would otherwise fall under the category of construction services. In the present case, the appellants were not undertaking the activity of erection of pipelines. Erection w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectronic devices including wiring etc. - The legislative intention was therefore clearly to cover only such installations within a commercial or residential building. 4.1 By 2004 Finance Act, a new service under the head 'construction service' was introduced with effect from 10.09.04. This service was defined to mean construction of new building or civil structure or a part thereof. Section 65 (30a) of the Act defined construction service as under:- 'Construction service means,- a) construction of new building or civil structure or a part thereof; or b) repair, alteration or distoration of, or similar services in relation to, building or civil structure,............ but does not include road, airport, transport terminal, bridge, tunnel, long distance pipeline and dam.' As the activity of construction of pipeline was specifically excluded from 'commercial or industrial construction service' the impugned order was void. It could not be held that since construction of long distance pipeline was excluded from levy of service tax under construction service, it was covered under taxable head of 'erection, installation or commissioning' service. That w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng entry since 1.7.03. Argument that the pipeline was not installed or commissioned by IHPL was misleading. The activity involved laying, jointing, testing and commissioning of PVC pipes which resulted in emergence of a pipeline. The works contract between IHPL and its clients against the turnkey contracts prescribed completing the entire work satisfactorily and commissioning within the stipulated period and maintaining the scheme for the specified period. Pipes were used for transporting water for distribution and hence fell within the definition of equipment. Equipment was a set of necessary tools, clothing etc. for a particular purpose. The exclusion of long distance pipeline from construction service did not mean that same item could not be charged to tax under another heading. Clause 30a underwent a change in 2005 budget omitting this exclusion. The impugned service was not in the course of commerce and had to be classified under erection, installation or commissioning service. The Daelim Industrial Company (supra) was not relatable to the present case. The Daelim Industrial Company case decided that a works contract could not be vivisected and the service portion subjected to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he letter dated 26.04.03, of L&T to IHPL cited as evidence was their internal correspondence.' 7.2 Appellant had not furnished returns for the material period or disclosed truly all material facts for verifying assessment. Larger period for demanding service tax not paid was correctly invoked in terms of Section 73 of the Act. Penalties were also correctly imposed. Section 73 did not contain rigorous conditions as in Section 11A of the Central Excise Act proviso. Omission or failure of the assessee in the matter of filing return was enough to invoke extended period. Ld. Consultant relied on 2008 (86) RLT 438 (CESTAT-Del.) = 2008-TIOL-671-CESTAT (Del.), wherein the filing of returns with some bills and abstract of the same was held to be inadequate disclosure to absolve the assessee from the charge of suppression. 8. We have considered the rival arguments. The dispute involves the meaning of the expression and legislative intent behind scope of the levy on erection, commissioning or installation. The impugned order found that upto 16.06.95, the assessee had rendered the taxable activity of erection. commissioning or installation of a plant. The Commissioner found that "plant r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced under Sub-section (ii) (b). The impugned order found that the service involved was specifically covered from 16.06.05 under the same head by the entry "plumbing, drain laying, or other installation for transport of fluids". We are inclined to agree with the appellants that this entry covers such facility provided in a building as it appears in the company of air conditioning system, lifts, electronic devices including wiring etc. which are installed in a building. The Commissioner found that "plant represented a fixed investment for carrying out certain institutional activity for business". The Ld. Consultant for the department has tried to defend the interpretation of the Commissioner of the expression plant. The Commissioner's interpretation of a plant would cover a long distance pipeline. We find it difficult to accept the above reading of the word plant in the context it is used. It is an inappropriate selection of the various meanings of this simple word. Plant in popular usage means a cluster of buildings or a building in which machinery are installed usually for manufacture of goods. Long distance pipeline is not even remotely associated with this common understandi ..... 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