TaxTMI 
TaxTMI 
2023 (7) TMI 64
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....y the appellant as that of "installation of structures'' in the shape of "piling work" for the main construction work either of bridges, roads or schools are appropriately classifiable under Erection, Commissioning or Installation Service taxable with effect from 01.05.2006. It was also found that in terms of master Circular No.96/7/2007-ST dated 23.08.2007, the appellant despite being a subcontractor is liable to pay service tax. The appellant even though had taken service tax registration but was found to have been filing "NIL" returns. Accordingly, vide Show Cause Notice (SCN) No.06/23732 dated 15.09.2011 the service rendered by the appellant was proposed to be called as Erection, Commissioning and Installation Service (ECIS) instead of Commercial or Industrial Construction Service (CICS). Service Tax amounting to Rs.19,43,878/- alongwith the proportionate interest and the appropriate penalties were also proposed to be recovered from the appellant. 2. The said proposal has been confirmed vide Order-in-Original No.89/2016 dated 06.12.2016 holding that the services rendered by the appellants are in nature of Erection, Commissioning and Installation Service (ECIS) as con....
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....5 (39a) of the Act. Though Commissioner (Appeals) simultaneously admitted that service rendered by appellant is in the nature of CICS under section 65 (25b) and are exempted too but still he has not ordered the setting aside of demand. Commissioner (Appeals) has rather committed further error by holding the services in question as works contract service. The findings of Order under challenge are therefore, beyond the scope of Show Cause Notice and the order under challenge is liable to be set aside on this score itself. 5. Finally, it is submitted that the extended period of limitation has wrongly been invoked. The appellant was duly registered with Service Tax Commissionerate. The returns were also duly been filed as NIL Returns purely on the ground that the services rendered by appellant either were exempted or liability was being discharged by the main contractor. It is also brought to the notice that during the period in question i.e. 2004-2011 there was a huge confusion about the liability of the subcontractors to pay service tax. There were several decisions supporting the case of subcontractors that they are not liable. However, there were few decisions holding that even ....
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....as that of works contract service. Accordingly, the foremost adjudication for us is the nature of the service rendered by the appellant. For the purpose we need to look into the definitions of these services. Erection, commissioning or installation services is defined under section 65 (39a) of Finance Act, 1994 which reads as follows:- "(39a) "erection, commissioning or installation" means any service provided by a commissioning and installation agency, in relation to, - (i) erection, commissioning or installation of plant, [machinery, equipment or structures, whether pre-fabricated or otherwise]; or (ii) installation of - (a) electrical and electronic devices, including wirings or fittings therefore; or (b) plumbing, drain laying or other installations for transport of fluids; or (c) heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work; or (d) thermal insulation, sound insulation, fire proofing or water proofing; or (e) lift and escalator, fire escape staircases or travelators; or (f) such other similar services;] Section 65 (25b) of Finance Act, 1944 de....
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....ry, 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". 8. Reverting to the facts of the present case, we observe that the appellant as subcontractor has executed the work orders as tabulated below: Sl.No. Name of the Contractee Work Order No. & Date Work allotted 1 Gammon India Ltd. 8514/17 dt.01.06.2006 Initial Pile Load Test 2 Gammon India Ltd. 8514/15 dt. 02.07.2006 Boring of test pile 3 Sanyukt Nirmata Letter dated 19.05.2006 Bored pile for school of charitable trust 4. Swastik Construction Co. Noticee's letter dated 30.08.2005 Piling work for nallah 5. PWD, New Delhi 23(13) SJHPD/2005/47 dated 17.01.2006 Initial load testing of piles 6. Gangotri Enterprises Ltd. Letter dated 07.06.2006 Laying of bored pile 7. Aanav Construction Company Noticee's letter dated 22.02.2005 Piling bore holes at Ludhiana Sl. No. Name of contractee Letter No. & date 1. JMC Project (India) Ltd. Dated 03.12.2008 2. Gammon India Ltd. Date....
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....missioner (Appeals) in the order under challenge. 11. We further observe that in the order under challenge, the Commissioner (Appeals), in addition, has classified the service as works contract service. But from the definition as mentioned above, the basic mandate for any activity to be called as works contract service is that the activity should involve the transfer of property in goods which are involved in the execution of such contract. In the present case, the appellant was acting as a sub-contractor/a job worker. The question of him being the owner of the goods used in pile formation works does not at all arise. The main contractor / service recipient himself was the owner of the goods. Commissioner (Appeals) has failed to appreciate the basic mandate of the definition of works contract service. Hence we hold that the services have wrongly been classified as works contract services. Commissioner (Appeals) has otherwise nowhere denied that the structure constructed by the appellant is in relation to the construction of bridges etc. which is different from structure mentioned in the definition of ECIS. He has also appreciated that the pile foundation works is classifiable un....