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TMI Blog2024 (8) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... ply or for sewerage disposal, when provided to Government/Government undertakings would be for non-commercial, non-industrial purposes, even when executed under turnkey/EPC contractual mode and would fall within the ambit of clause (b), Explanation (ii) of Section 65(105)(zzzza); and would consequently not be exigible to Service Tax, in view of the exclusion enacted in clause (b). Thus, the appellant is not liable to pay service tax for the activity undertaken by them for laying down the pipelines for Government/Government Undertakings for supply of water from KWA in Thiruvananthapuram City. In view of the this , we find that the appellant is not liable to pay service tax - there is no liability of the appellant to pay service tax in this case - issue is answered in favour of the appellant. Whether the refund claims filed by the appellant of service tax paid, which was not payable by the appellant is hit by the provisions of Section 11B of the Central Excise Act, 1944, or not? - HELD THAT:- The Hon ble High Court in the case of MDP Infra (India) Private Limited [ 2019 (2) TMI 208 - MADHYA PRADESH HIGH COURT ] has examined the issue although the appellant was not liable to pay servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on pipes and pipe fittings. The appellant was also providing services in the nature of construction/laying down of pipelines for which it is duly registered with the service tax authorities. The Appellant was executing several composite projects for various local authorities and municipal corporations. Vide an agreement dated 03 October 2006 and a Letter of Acceptance dated 19 September 2006, the Appellant was awarded a contract by Kerala Water Authority (KWA) for the construction of distribution system for water supply for Thiruvananthapuram City. Prior to 01 June 2007, such services, although classifiable as Commercial or Industrial Construction Services (CICS), were not taxable as the same were non-commercial and nonindustrial in nature and service tax was accordingly not charged on the invoices raised upon KWA before the period 01 June 2007. However, with effect from 01 June 2007, "works contract services" were covered as a taxable service under Section 65(105)(zzzza) of the Finance Act, 1994. The Appellant was of the opinion that the services provided by them were covered under "works contract services" as an EPC/turnkey project, started to raise invoices reflecting service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants under bonafide mistake of law, therefore, the statutory time limit under Section 11B of the Central Excise Act, 1944, would not be applicable to the facts of this case. To support, he relied on the decision of the Telangana High Court in the case of M/s Credible Engineering Construction Projects Limited reported in 2024 (4) TMI 1041. 3.2 He further submitted that as the appellant has not received any service tax from the service recipient and the same has been communicated to them from Tokyo Engineering Consultants Company Limited , therefore, the appellant has passed the bar of unjust enrichment. Therefore, the refund claims are to be allowed. 3.3 On the contrary, the ld.A.R. for the Revenue, submitted that the refund claims are hit by bar of unjust enrichment as held by the Hon'ble Madhya Pradesh High Court in the case of MDP Infra (India) Pvt. Limited Vs. Commissioner of Customs, Central Excise & CGST reported in 2019 (29) GSTL 296 (M.P.). He further submits that the issue of taxability and unjust enrichment has not been dealt with by the ld.Adjudicating Authority. Therefore, the matters are to be remanded back to the ld.Adjudicating Authority to consider the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty is not taxable since it is not used or to be used, engaged or to be engaged primarily for industry or commerce? (B) Whether construction of canals for irrigation purposes and laying of pipelines including as part of lift irrigation systems, undertaken for the Government/Government undertakings is liable to Service Tax under WCS as turnkey projects, including engineering, procurement and construction or commissioning projects under clause (c) 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 (c) 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 (c) 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 irrig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be classified on the basis of the essential character of the service provided thereby, with the aid of classification guidelines set out in Section 65A(2) of the Act. Consequently, a turnkey/EPC contract must be classified under any of the clauses (a) to (d), Explanation (ii), Section 65(105)(zzzza). The bundled bouquet of services provided as turnkey/EPC contract, classifiable as Commercial or Industrial Construction Service (CICS) prior to 1-6- 2007, would be classifiable under clause (b), Explanation (ii), Section 65(105)(zzzza) on and from 1-6-2007 and would not be exigible to Service Tax if the rendition of service thereby is primarily for non-commercial, non-industrial purpose, in view of the exclusionary clause in clause (b) of the definition of WCS. This is the only possible and harmonious interpretation possible of the several clauses under Explanation (ii) of Section 65(105)(zzzza), a distinct taxable service defined with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on construction of canals by Government agencies - Regarding On a reference being received by the Board, two following issues were examined for a clear understanding of facts. The first is regarding leviability of service tax on construction of canals for Government projects. 1. As per Section 65(25b) of the Finance Act, 1994 "commercial or industrial construction service" means -- (a) construction of a new building or a civil structure or a part thereof; or (b) construction of pipeline or conduit; or (c) completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure; or (d) repair, alteration, renovation or restoration of, or similar services in relation to, building or civil structure, pipeline or conduit, which is -- (i) used, or to be used, primarily for; or (ii) occupied, or to be occupied, primarily with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g work contracts :- "(i) Construction of EWS houses for Special Area Development Authority (A Government Authority) vide work order No. 02/SADA/2014-15, Agreement No. 04, dated 22-12-2014. (ii) Construction of LIG houses (Affordable Housing) for Indore Development Authority vide Four/Accounts/12-13/70006, dated 19-11-2012, Agreement No. 82/2012-13/IDA. (iii) Construction of Model School Building at Morena for PWD, PIU Division-4 Gwalior (Department of Government of Madhya Pradesh) work order No. : 2/2012-13, dated 15-6-2012, E-tender No. 14204 and office No. 1589. (iv) Construction of Model School Building at Sabalgarh for PWD, PIU Division-4 Gwalior (Department of Government of Madhya Pradesh) work order No. 2/2012-13, dated 15-6-2012, E-tender No. 14209 and office No. 1599, dated 2-11-2012. (v) Construction of Model School Building at Pahadgarh for PWD, PIU Division-4, Gwalior (Department of Government of Madhya Pradesh) work order No. : 2/2012-13, dated 15-6-2012, E-tender No. 14209 and office No. 1601, dated 2-11-2012. (vi) Construction of Boundary wall at National Law Institute University, a university established by State Legislature of Madhya Pradesh, Bhopa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all material times. (3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2016 receives the assent of the President." 10. In these set of facts, the Hon'ble High Court has held as under : "16. As regard to substantial question of law at 'B', the said question in given facts of present also does not arise for consideration. The appellant was under legal obligation to deposit the service tax in respect of the service rendered qua nonexempted service. The contentions that it was beyond the control of the appellant to deposit the service tax on exempted service is misconceived. Evidently, the Notification No. 12/2012 & 25/2012 ceased to exist w.e.f. 1-4-2015. The exemption was revived by notification dated 1-3-2016. But since it was prospective in effect, the appellant was not entitled for any exemption, which the appellant was aware of and with open mind and eyes deposited the service tax due with interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by bar of unjust enrichment or not ? 12. We find that the appellant has produced a letter issued by the service recipient. For better appreciation of facts, the said letter is extracted herein below : From the letter dated 31.10.2011 issued by Tokyo Engineering Consultants Co.,Ltd., who are the consultant for KWA, it is clearly stated that as the service rendered by them is not a taxable service, therefore, the service recipient refused to pay service tax to the appellant, in that circumstances, we hold that the appellant has borne the service tax by themselves and have passed the bar of unjust enrichment. Accordingly, we hold that the refund claim filed by the appellant are not hit by the bar of unjust enrichment. Accordingly, the Issue No.(c) is also answered in favour of the appellant. 13. As all the issues have been answered in favour of the appellants, accordingly, we hold that the appellants are entitled for refund claim. Consequently, we direct the adjudicating authority to sanction the refund claim to the appellants within one months from the date of receipt of this order. 14. Appeals are disposed off in the above terms. ( Pronounced in the open court on 09. 08. 202 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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