Erection and installation of fire hydrant systems treated as service work, with tax demand sustained after abatement.

Supply and erection of a fire hydrant system was treated as a composite activity involving both supply and installation, and on those facts it fell within Erection, Commissioning or Installation Services rather than Works Contract Service. The service tax liability was computed after extending the benefit of abatement under Notification No. 1/2006-ST dated 01.03.2006, and the demand was sustained on that basis.

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Issues: Whether the activity of supplying and erecting a fire hydrant system was classifiable under Erection, Commissioning or Installation Services or under Works Contract Service, and whether the demand of service tax with abatement was sustainable.

Analysis: The activity involved both supply of the fire hydrant system and its erection and installation. On these facts, the service answered the description of erection and commissioning service. The benefit of abatement under Notification No. 1/2006-ST dated 01.03.2006 had been extended while determining the tax liability.

Conclusion: The classification under Erection, Commissioning or Installation Services was upheld and the service tax demand with abatement was sustained against the assessee.

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