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of <h1>Tribunal classifies services for Delhi Jal Board under Commercial Construction Service</h1> <h3>Vijay Kumar Kataria Versus CCE, Delhi</h3> The Tribunal ruled in favor of the appellant, determining that the services provided for the Delhi Jal Board should be classified under Commercial and ... Classification of services - some contracts executed by the appellant for the Delhi Jal Board (DJB) in which nature of work involved replacing of old damaged water line, for improvement of water supply in various villages as well as replacement of badly silted and damaged sewer lines - case of Revenue is that the services rendered by the appellant are classifiable under Management, Maintenance or Repair Service defined under Section 65 (4) of the Finance Act, 1994 - Held that: - The nature of the activity involves replacement of defective pipelines as also de-silting and repairing of existing pipelines - It is seen that the contract is for replacement of pipelines in specified segments. It is not in the nature of an ongoing maintenance contract. The perusal of the contract further reveals that the same is not in the nature of construction or laying of pipelines/conduit. After considering the nature of the activity undertaken by the appellant and perusal of a few sample contracts, it is found that the service is more specifically covered under the category of Commercial and Industrial Construction, under the Sub-clause (d) of Section 65 (25b) - further, the activity has been executed for Delhi Jal Board which is not a commercial organization. The classification under Management, Maintenance or Repair will not cover the activities of the appellant since these are not in the nature of Maintenance Contract for specified period. The activities are classified under Commercial Industrial Construction and further will not be liable of payment of Service Tax during the disputed period in as much as the activity carried out is for Delhi Jal Board which is not a commercial organization - appeal allowed - decided in favor of appellant. Issues:Classification of services under Commercial and Industrial Construction or Management, Maintenance, or Repair for Service Tax liability.Analysis:The appeal was filed against the Order-in-Original regarding the classification of services provided by the appellant for the Delhi Jal Board. The dispute centered around whether the services should be classified under Management, Maintenance, or Repair Service or under Commercial and Industrial Construction Service for Service Tax liability. The Department contended that the services fell under Management, Maintenance, or Repair Service, while the appellant argued for classification under Commercial and Industrial Construction Service.The appellant, represented by their advocate, argued that the services should be classified under Commercial and Industrial Construction Service, specifically under the clause covering Repair, Alteration, Renovation, etc., in relation to pipelines. They emphasized that since the services were provided to Delhi Jal Board, a non-commercial entity, no Service Tax should be applicable. The advocate cited relevant case laws to support their argument.On the other hand, the Department, represented by the Ld. DR, supported the impugned order's classification under Management, Maintenance, or Repair Service. They pointed to the adjudicated authority's conclusion that the appellant's activities were part of a maintenance contract, justifying the Service Tax demand and penalties imposed.After hearing both sides and examining sample contracts, the Tribunal found that the services provided by the appellant for the Delhi Jal Board, involving replacement and repair of pipelines, aligned more closely with Commercial and Industrial Construction Service under Section 65 (25b). The Tribunal noted that the activities were not part of ongoing maintenance but specific projects for a non-commercial entity. Consequently, the Tribunal concluded that the services should be classified under Commercial and Industrial Construction and ruled in favor of the appellant, setting aside the impugned order and allowing the appeal.In conclusion, the Tribunal determined that the services provided by the appellant for the Delhi Jal Board should be classified under Commercial and Industrial Construction Service, exempting them from Service Tax liability during the disputed period due to the nature of the projects executed for a non-commercial entity.
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