2009 (12) TMI 140 - AT - Service Tax

Appellate Tribunal rules in favor of appellant, overturning Service Tax demand for laying pipelines

The Appellate Tribunal CESTAT, Chennai ruled in favor of the appellant, setting aside the Service Tax demand and penalty imposed for laying pipelines, ... Erection, Commissioning and Installation Service - Service Tax liability for laying of pipelines - precedential effect of Tribunal decisions where appeal is pending but operation not stayedErection, Commissioning and Installation Service - Service Tax liability for laying of pipelines - precedential effect of Tribunal decisions where appeal is pending but operation not stayed - Whether laying of pipelines falls within the scope of 'Erection, Commissioning and Installation Service' so as to attract service tax, and whether the Tribunal should follow its earlier decision in Indian Hume Pipe Co. Ltd. when the Revenue's appeal is pending before the Apex Court but operation of the Tribunal's order is not stayed. - HELD THAT: - The Tribunal examined the demand and penalty confirmed on the basis that laying of pipelines amounted to 'Erection, Commissioning and Installation Service'. It relied on its earlier decision in Indian Hume Pipe Co. Ltd. v. CCE [2008] 16 STT 136 (Chennai - CESTAT), in which the Tribunal held that laying of pipelines is not covered by that service and therefore does not attract service tax. Although the adjudicating authority declined to follow that precedent because an appeal had been filed by the Revenue, the Tribunal noted that the Revenue's appeal against the earlier decision is pending before the Apex Court and, crucially, the operation of the Tribunal's order has not been stayed. In these circumstances the Tribunal applied the existing binding precedent of the earlier Tribunal decision and followed it in disposing of the present appeal. [Paras 2]Impugned order set aside and appeal allowed, holding that laying of pipelines is not taxable as 'Erection, Commissioning and Installation Service' and applying the earlier Tribunal decision since the appeal against it is pending but not stayed.Final Conclusion: The Tribunal allowed the appeal, setting aside the demand and penalty by applying its earlier decision that laying of pipelines does not constitute 'Erection, Commissioning and Installation Service', noting that the Revenue's appeal against that precedent is pending before the Apex Court but its operation has not been stayed. The Appellate Tribunal CESTAT, Chennai ruled in favor of the appellant, setting aside the Service Tax demand and penalty imposed for laying pipelines, citing a previous decision that laying pipelines does not fall under 'Erection, Commissioning and Installation Service' liable to tax. The Tribunal's decision in Indian Hume Pipe Co. Ltd.'s case was followed, as the issue was already covered by that decision.