TaxTMI 
TaxTMI 
2012 (8) TMI 750
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....in this case are as follows :- 2.1 The appellant M/s. Surindra Engineering Co. Ltd., are manufactures of pipes and are also service tax assessee in respect of GTA service. They undertook manufacture and supply of pipes to Maharashtra Jeevan Pradhikaran and as per the contract entered into with the said organisation apart from the supply of pipes they were also required to undertake the activity of laying, connecting, jointing pipeline of water projects till the stage of testing and commissioning of raw and pure water by pumping machinery. The department was of the view that the said activity came under the category of "erection, installation and commissioning service" as defined under Section 65(105)(zzd) of the Finance Act, 1994 an....
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....e. Rs. 7,62,26,257/-. The ld. Commissioner further imposed a penalty of Rs. 8.00 crores on the appellant under Section 78 of the Finance Act for not paying the tax by suppressing the fact with intent to evade the same. The appellants are before us against the impugned order. 3. The ld. Counsel for the appellant submits that in an identical set of circumstances in the case of Indian Hume Pipe Co. Ltd. v. C.C.E., Trichy, reported in 2008 (12) S.T.R. 363 (Tri.-Chennai), this Tribunal had held that laying of pipes for use in water supply projects will not come under the category of erection, commissioning and installation service and, therefore, service tax is not payable on the said activity under the category of erection, commissionin....
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....tegory of works contract and not under the category of erection, commissioning and installation service. The ld. Counsel submits that while confirming the service tax demand, the ld. Commissioner has taken into account the entire value of the contract, which is for supply of goods as well as service and abatement has been given only for the period from March 2006 to March 2007 in terms of notification No. 01/06, dated 1-3-2006. He submits that they have discharged VAT/Sales Tax liability on the goods supplied and, therefore, the value of the goods has to be excluded while computing the duty demand which has not been done in the instant case and, accordingly, the demand confirmed is bad in law. 3.1 The ld. Counsel also relies upon th....
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.... adjudicating authority has directed jurisdictional Assistant Commissioner to provide abatement in terms of the Notification No. 01/06 dated 1-3-2006. Therefore, the inclusion of value of goods supplied while computing the demand for service tax is on account of non-furnishing of required data by the appellant with supporting evidences. The ld. JCDR also relies on the judgment of the Tribunal in the case of VED Contractors Pvt. Ltd. v. C.C.E., Delhi- II, reported in 2011-TIOL-1008-CESTAT-DEL wherein while considering the stay application in a case relating to works contract, it was held that while determining the value of the taxable service the value of material provided by the contractor has to be included in the assessable value. The JCD....
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....was held that laying of pipeline for water supply projects will not come under the category of erection, commissioning and installation service. Though the department has filed an appeal before the hon'ble High Court of Madras against the said decision, no stay has been obtained by the ''department in respect of the said decision. Further, the Board's own Circular dated 24-5-2010 makes it absolutely clear that unless the activity undertaken results in the emergence of an "erected, installed and commissioned plant, machinery, equipment or structure", the activity will not come under the category of erection, commissioning and installation service. Laying of pipelines cannot be construed as a plant, machinery or equipment or structure. Furthe....