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TMI Blog2024 (2) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... , whether termed as works contract, turnkey or EPC, the principal 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. The above reproduced Larger Bench ratio would squarely cover the issue in favour of the appellant in the case in hand. Accordingly, the entire demand which has been raised by the show cause notice is liable to be set aside. There are strong force in the contentions raised by the Learned Counsel that 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 STATE OF ANDHRA PRADESH ORS. VERSUS LARSEN TOURBO LTD. ORS. [ 2008 (8) TMI 21 - SUPREME COURT] , as it is the admitted fact that contracts which are awarded to the appellant are for supply, erection commissioning of various irrigation pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th supply , erection and commissioning, material and labour and it is classifiable under works contract services and the issue is now settled by the Apex Court in the case of CCE Vs. Larsen Tourbo Ltd., [2015 (39) STR 913] and cannot be taxed prior to 01.06.2007; post 01.06.2007 also this activity in the show 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 ruling of 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 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 questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g engineering, procurement and construction or commissioning projects under clause (e) of Explanation (ii) in the definition of WCS or is excluded from the ambit of WCS since it is in respect of a Dam and thus stands excluded from WCS, as defined? (C) Whether, turnkey projects, including engineering, procurement and construction 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) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soil preparation and filling, supporting masonry work, jointing of pipes, electro-mechanical works or pumping stations and like activity, is classifiable only under Commercial or Industrial Construction Service (CICS) for the period up to 1-6-2007 and not under Erection, Commissioning or Installation Service (ECIS); (b) Issues (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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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