Pre-commissioning work for petrol pump projects was not taxable installation service, and extended limitation failed for lack of suppression.

Pre-commissioning civil and allied work carried out for petrol pump projects, where pumps and related equipment were supplied by the customer, was held not to amount to taxable erection, commissioning or installation service or commercial and industrial construction service. Free-supply items such as pumps and tanks were excluded from the taxable value, and the assessee was held entitled to the related notification benefit. On limitation, the extended period was rejected because mere non-disclosure, especially after departmental awareness through audit, did not establish positive suppression. The demand was therefore time-barred and the impugned order was set aside with consequential relief.

---

---

Issues: (i) whether the activities undertaken for petrol pump projects constituted taxable erection, commissioning and installation services or commercial and industrial construction services, and whether free-supply items formed part of the taxable value; (ii) whether the demand was barred by limitation.

Issue (i): whether the activities undertaken for petrol pump projects constituted taxable erection, commissioning and installation services or commercial and industrial construction services, and whether free-supply items formed part of the taxable value.

Analysis: The work executed for oil companies was found to be predominantly pre-commissioning civil and allied work for installation of pumps supplied by the oil companies. Relying on the earlier view that such pre-commissioning work does not amount to installation or commissioning of plant, machinery or equipment, the Tribunal held that the activity did not attract service tax under the categories invoked. It was also held that free-supply items such as pumps and tanks could not be included in the taxable value, and the appellant was entitled to the benefit associated with the cited notification.

Conclusion: The issue was decided in favour of the assessee.

Issue (ii): whether the demand was barred by limitation.

Analysis: The demand had been raised by invoking the extended period, but the Tribunal held that mere non-disclosure of pre-commissioning services, particularly when the department became aware of the facts through audit, did not establish positive suppression so as to justify the longer limitation period.

Conclusion: The demand was held to be time-barred.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief to the assessee.

Ratio Decidendi: Pre-commissioning civil and allied work undertaken for installation of equipment supplied by the customer does not amount to taxable erection, commissioning or installation of plant, machinery or equipment, and extended limitation cannot be invoked without positive suppression of facts.

---