TaxTMI 
TaxTMI 
2014 (3) TMI 778
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....fore us. 2. The brief facts of the case are as follows:- The appellant has been supplying GRP pipes manufactured by it on payment of Central Excise duty and also carrying out activity of lowering, laying, joining and testing of such GRP pipes at the site of the customers namely, (i) M/s Videocon Narmada, (ii) Birla Copper, (iii) M/s IVRCL Infrastructure, (iv) Gujarat Industrial Development Corporation (v) Vizag Municipal Corporation and (vi) Surat Municipal Corporation. These activities ultimately led to construction of long distance pipelines or conduits, which appeared to be taxable under the category of Commercial or Industrial Construction Service. Accordingly, a show-cause notice dated 6.8.2008 was issued to the applicant proposing to classify the services undertaken by them under the category of Commercial or Industrial Construction Service and demanding Service Tax amounting to Rs.1,25,78,990/- along with interest thereon and also proposing to impose penalties. In respect of such pipelines laid for the parties mentioned at sr. No. (i) to (iii) above, the appellant discharged Servic....
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.... supply. It is his further contention that the department was well aware of the activities undertaken by the appellant as early as 2005 when Service Tax was demanded on the said activity vide letter dated 18.1.2005 under the category of 'Testing and Analysis Services'. The department had also undertaken audit of the records from time-to-time and, therefore, the extended period of time could not have been invoked for confirmation of Service Tax demand. It is his further contention that since the appellant bonafidely believed that the activity undertaken did not amount to 'Commercial or Industrial Construction', there was a reasonable cause for his failure to pay Service Tax and hence, penalty should be waived invoking the provisions of section 80 of the Finance Act, 1994. Accordingly, he pleads for setting aside the impugned order and allowing the appeal. 4. The learned Addl. Commissioner (AR) appearing for the Revenue strongly refutes the contentions raised by the Counsel for the appellant. He submits that GIDC has been set up to establish and promote industrial estates and commercial centres and, therefore, laying of pipelines for water supply to industrial estates and ....
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....rvice" means - (a) construction of a new building or a civil structure or a part thereof; or (b) construction of pipeline or conduit ; or (c) completion and finishing services such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure; or (d) repair, alteration, renovation or restoration of, or similar services in relation to, building or civil structure, pipeline or conduit, which is - (i) used, or to be used, primarily for; or (ii) occupied, or to be occupied, primarily with; or (iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry , but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams;" From t....
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....nd development, the structure and facilities provided by GIDC is for the growth of industrial units and commercial establishments. The pipelines are for supply of water to industrial units and commercial establishments. From these legal provisions, it is absolutely clear that the laying of pipelines undertaken by the appellant for M/s GIDC comes squarely and clearly within the definition of 'Commercial or Industrial Construction service' as defined under Section 65(25b) of the Finance Act, 1994, and, therefore, the appellants are liable to discharge Service Tax liability on the consideration received in respect of such activities. 5.4 The appellant has also undertaken the plea that activity included both supply of pipeline as also laying of pipelines and, therefore, it would come within the purview of Works Contract and a composite contract cannot be vivisected. However, this contention of the appellant is no longer sustainable in view of the decision of the Hon'ble High Court of Delhi in the case of G.D.Builders & Ors. vs. Union of India - 2013 (32) S.T.R. 673 wherein it has been held that a composite contract can be vivisected and service portion of composite contracts....