TaxTMI 
TaxTMI 
2024 (3) TMI 802
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....t Learned Counsel appearing on behalf of the Respondent/Assessee at the outset submits that the Revenue filed the present appeal only on ground that the judgment whereby the issue is covered in the case of Larsen & Toubro Ltd Vs. CST, 2011 (22) STR 459 (1) has been appealed against by the Revenue before the Hon'ble Gujarat High Court. He submits that merely by filing the appeal the binding effect of the Tribunal order cannot be ignored, particularly when there is no stay by the Hon'ble High Court. Therefore, Larsen & Toubro Ltd decision of this Tribunal prevails and the learned Commissioner could have followed the binding president. He further submits that the issue is covered by various following judgments:- CCE VS PSL Ltd, 2013 (31) STR 570 9T Larsen & Toubro Ltd Vs CST, 2011 (22) STR 459 (1) Commissioner Vs Larsen & Toubro, Tax Appeal No. 1199 of 2011 Order dated 18.04.2012 issued on admission of department appeal preferred against the Order of CESTAT Ahmedabad in L&T (Supra) Indian Hume Pipe Co. Ltd Vs CCE, 2008 (12) STR 363 (T) A.Sekar Vs CCE, 2010 (19) STR 82 (T) Shree Hindustan Fabricators Vs CCE, 2020 92) TMI 110- CESTAT....
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....and clarified. He submitted that the issues raised by the department were argued and replied by the appellant's counsel and therefore the department should not have be given another opportunity to make written submissions in writing. However, he has not cited any specific provisions of statute or precedent decisions to support this view. We do not understand how the appellant has been prejudiced by allowing the department to make written submissions especially when the Tribunal has taken care to ensure that copy of the written submissions was sent to the learned advocate so that he also can make written submissions in response. In the absence of citation of any specific statutory provision or judicial precedent, this objection deserves to be overruled and rejected. 4. The definition of commercial or industrial construction service as defined under Section 65(25b) of Finance Act, 1994 is as under : " 'Commercial or Industrial Construction Service' 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, ....
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....al that water supply project being infrastructure facility and civic amenity provided by State in public interest, not an activity of commerce or industry was only obiter dicta. In that case, the Tribunal was dealing with the scope of levy on "erection, commissioning or installation" service and the Tribunal had clearly come to the conclusion that the service provided in that case was not covered by any of the three expressions used in the service and therefore the observation about water supply project had no relevance to the issue to be decided. Learned SDR cited the judgments in the case of M/s. Ulhas Oil & Chemical Indus. P. Ltd. v. H.M. Singh as reported in 1988 (36) E.L.T. 462 (Bom.) and in the case of M/s. Spie Capag S.A. v. CCE, Mumbai as reported in 2009 (243) E.L.T. 50 (Tri-Mumbai), to submit that the opinion of Court on any issue not necessary for deciding the dispute, cannot be considered as a ratio of that case. 8. The second submission made by the learned SDR in this regard was that the decision in the case of M/s. Nagarjuna Construction Co. Ltd. cannot be applied so that the Tribunal had not considered the meaning of "commerce" in detail. It was submitted th....
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....e came from sale of water to local bodies rural population. The revenue was less than l/3rd of the cost incurred to maintain water supply by the Board. The Board is run by substantial amounts released by the State Government as grant every year. These facts show that the pipeline in question were not laid to facilitate any commercial or industrial activity. We find that in the decision of the Tribunal in Indian Hume Pipe Co. Ltd. v. CCE, Trichy reported at 2008 (12) S.T.R. 363 (Tri.-Chennai) which dealt with taxability of long distance pipeline laid by the appellant therein under the entry 'erection, commissioning or installation' of the Act held as follows : "We also find that a water supply project is an infrastructure facility and a civic amenity the State provides in public interest and not an activity of commerce or industry. The impugned order also did not hold it to come under a service of commercial or industrial nature as submitted by the ld. Consultant for the Revenue. Therefore, the impugned order demanding duty on the activity of laying of pipeline interpreting it to be erection, commissioning and installation of a plant is totally misconceived and unacceptable....
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....nd themselves in an embarrassing position to choose between the conflicting opinions. The general public would be in dilemma to obey or not to obey such law and it, ultimately, falls into disrepute. These are the observations made by the Apex Court in Sundarjas Kanyalal Bhathija v. Collector, Thane, AIR 1990 S.C. 261." 11. Therefore, the question arises as to whether we should refer this issue to Larger Bench. At this juncture, it would be worthwhile to consider the decision cited by the learned SDR to support his view. In the case of Madhya Pradesh State Electricity Board, Hon'ble Supreme Court was considering whether an office of a lawyer or firm of lawyers is a commercial establishment for the purpose of determination of rate at which electricity is to be supplied. Hon'ble Supreme Court held that expression "commerce" or "commercial" necessarily has a concept of a trading activity. It was also observed that comparing legal profession with that of trade and business is far from correct approach and it is totally misplaced. It can be seen that in that case, the Apex Court was not determining the meaning of "commerce" or "commercial" organization, but was only looking as t....
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....ecause the charges levied were fixed by Government, it does not take away the essential character of the activity, which is "commerce". The examples of the oil companies, power utility companies were cited to show that just because Government fixes the rate and there is a cross-subsidy, the charges cannot be said to be non-commercial. (ii) It was also said that GWSSB was covered under Industrial Dispute Act, 1947 and therefore is industry. (iii) GWSSB was authorized to raise money and also to give loans to Government or local bodies. Therefore, it can be seen that GWSSB is functioning like any commercial entity by raising money from banks and financial institutions, advancing loans and recovering interest for the same. The very fact that advancing loans is one of the objective behind setting up of GWSSB, GWSSB is meant for generating services and earning profit on its activities. 16. Whether GWSSB can be categorized as a industry or not, is not relevant at all. In fact, the learned SDR himself has submitted that the definition of the services does not talk about the status or the definition of the service receiver. Any service receiver irrespective of its....
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....ors as one for commerce i.e. to say to buy and sell water. The name of the scheme for which pipeline was laid was also Mehsana District Water Supply Scheme. 17. The next question that is to be answered is whether the pipeline can be said to have been used or used primarily for commerce or industry. The only point that has been stressed by the Revenue is that the GWSSB is buying water @ Re. 1/- per ltr. and selling at Rs. 2/- per ltr. to Rs. 15/- per ltr. The definition uses words "used for commerce" or "primarily used for commerce". This would mean that Revenue is required to show that the purpose of construction of pipelines is for "commerce" or "primarily for commerce". "Commerce" would mean buying and selling not necessarily for profit according to Revenue. But, the question here is the purpose of buying water by GWSSB was for selling or not. Obviously, the purpose of buying water and bringing it from Narmada Dam was not for selling it, but for supplying it to needy people. In this case, buying and selling is incidental. The purpose is supply of water to the needy citizens of the State. The term used "for commerce" would mean that only purpose would be buying and sellin....