AI Drafter 
TaxTMI 
TaxTMI 
2024 (11) TMI 474
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....ation (SMC), Gujarat Water Supply and Sewerage Board (GWSSB), Canal Division, NHAI and Surat Urban Development Authority. 2. The investigating wing of the Department namely Director General of Central Excise intelligence searched the premises of M/s. Shree Hindustan Fabricators on 09.12.2011 for violation of the provisions of levy of Service Tax by them. The appellant being the sub-contractor of M/s. Shree Hindustan Fabricators have also been issued show cause notice dated 22nd October, 2013 demanding Service Tax of Rs. 7,44,668/- under the extended time proviso under Section 73 of the Finance Act, 1994. The provisions of demanding interest under Section 75 and Levy of penalty under Section 77 and 78 of the Finance Act has also been invoked. The basic premise on which the impugned show cause notice has been issued to the appellant is that the appellant have worked as a sub-contractor in respect of laying of the pipeline for water supply and drainage which falls under the service category of erection, commissioning and installation service and therefore, the appellant should have paid the Service Tax on the services provided by them to their principles namely M/s. Shree Hindustan....
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....ase of INDIAN HUME PIPE CO. LTD. following has been observed: "8. We have considered the rival arguments. The dispute involves the meaning of the expression and legislative intent behind scope of the levy on erection, commissioning or installation. The impugned order found that up to 16-6-95, the assessee had rendered the taxable activity of erection, commissioning or installation of a plant. The Commissioner found that "plant represented a fixed investment for carrying out certain institutional activity for business". The water supply system involving pipelines is therefore seen as a plant. The activity undertaken by IHPL is construction of pipeline by earthwork excavation, conveying and lowering of PSC/MS pipes and MS specials, AC pipes, PVC pipes, CI/GI pipes and jointing materials into the trench; laying to proper grade and alignment; refilling the trenches with excavated soil after laying of pipes, construction of sluice valve pits, scour valve pits, air valve pits, thrust blocks, etc. 8.1 We find ourselves in agreement with the appellants' reading of the expressions contained in the relevant entry, namely, 'erection, commissioning or installation'. We find i....
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....nce pipeline. We find it difficult to accept the above reading of the word plant in the context it is used. It is an inappropriate selection of the various meanings of this simple word. Plant in popular usage means a cluster of buildings or a building in which machinery are installed usually for manufacture of goods. Long distance pipeline is not even remotely associated with this common understanding of the word plant. 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." 5.2 While affirming the decision of tribunal in case of INDIAN HUME PIPE(supra), the Hon'ble High Court of Madras relied on the decision of Larger Bench of tribunal in case of LANCO INFRATECH LTD. 2015 (38) S.T.R.709 (Tri.-LB). Hon'ble High C....
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....e serviced provided by the appellant under the head of Works Contract or Commercial or Industrial Construction Service has been made against the appellant. In these circumstances we are unable to uphold the demand raised against the appellant in respect of activities relating to laying of pipelines for Surat Municipal Corporation, Gujarat Water Supply and Sewerage Board (GWSSB), Canal Division, NHAI And M/s. Surat Urban Development Authority. 5.5. The revenue has also argued that in some cases the appellant have acted as sub-contractor and not as main contractor. We find that the said argument is of no use as the demand has been raised solely under the category of ECIS and in view of the decision of Hon'ble High Court of Madras and the Large Bench cited above, no demand under the said head can be raised against the appellant." 4. In view of the above, since the present appeals appears to be part of the investigation which have been carried out against M/s. Shree Hindustan Fabricators and the present appellants are only the sub-contractor of the main contractor M/s. Shree Hindustan Fabricators and were engaged in providing service of laying pipelines for water supp....