TaxTMI 
TaxTMI 
TaxTMI 
2025 (1) TMI 633
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....e in the case of the respondent ? (iii) Whether the order dated 09.08.2024 passed by the Learned Tribunal on the issue No. (c) is against the decisions of the Hon'ble Supreme Court as well as the Hon'ble High Courts? (iv) Whether the Learned Tribunal committed gross error of law in sanctioning the refund to the respondent by ignoring the statutory obligation, finding of the adjudicating authority as well as the Appellate Authority when the respondent had voluntarily deposited the service tax by correctly classifying the service under "Commercial and Industrial Construction Service" and later under "works Contract Service"? 2. We have heard learned Advocate appearing for the appellant/assessee and learned standing Counsel appearing for the respondent department. 3. The first issue is to be considered in the instant case is whether the services rendered by the respondent/assessee is liable for payment of service tax. It is not in dispute that the assessee performed the composite service including the construction/laying down of drinking water supply line awarded or Kerala Water Authority (KWA) in Thiruvanantapuram City Region for the period from 01.06.2007 to 31.10.2012. The....
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....some of the allegations in the show-cause notice for which the assessee submitted their reply along with the supportive documents. The adjudicating authority by order dated 18th October, 2012 rejected the explanation offered and confirmed the proposal in the show-cause notice and rejected the refund applications. 9. Aggrieved by the same the assessee preferred appeal to the Commissioner (Appeals) Central Excise, Appellate No. 1 Calcutta, who by order dated 30th December, 2013 rejected the appeal. 10. Aggrieved by such order the assessee preferred appeal before the learned Tribunal. The learned Tribunal by impugned order had allowed the appeal and set aside the orders passed by the adjudicating authority as affirmed by the first appellate authority. 11. Aggrieved by such order passed by the learned Tribunal the revenue is before us by way of this appeal. The first issue has to be decided whether the contract which was performed by the assessee for the Kerala Water Supply Authority was a taxable service under Works Contract Service in terms of Section 65(105) (zzzza) of the Finance Act or not. 12. To answer these questions, certain factual details have to be taken note of. It is ....
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....d be relevant for the cases on hand, which are quoted hereinbelow: "(A) Whether laying of pipelines for lift irrigation systems, transmission and distribution of drinking water or sewerage, undertaken for Government/Government undertakings should be classified under ECIS as erection, commission or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise; or installation of plumbing, drain laying or other installations for transport of fluids, enumerated in Section 65 (105) (zzd) and defined Section 65 (39a), during 16-6-2005 to 31-5-2007; or must be classified under CICS, as amounting to construction of pipeline or conduit, and if classifiable under the later provision, whether the activity is not taxable since it is not used or to be used, engaged or to be engaged primarily for industry or commerce? (B) Whether construction of canals for irrigation purposes and laying of pipelines including as part of lift irrigation systems, undertaken for the Government/Government undertakings is liable to Service Tax under WCS as turnkey projects, including engineering, procurement and construction or commissioning projects under clause (e) of Explanat....
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....e exigible to Service Tax if the rendition of service thereby is primarily for non-commercial, non-industrial purpose, in view of the exclusionary clause in clause (b) of the definition of WCS. This is the only possible and harmonious interpretation possible of the several clauses under Explanation (ii) of Section 65 (105) (zzzza), a distinct taxable service defined with constituent elements thereof substantially drawn from elements of preexisting taxable services like ECIS, CICS or COCS; and other services when bundled to amount to turnkey/EPC; (iii) Construction of canals/pipelines/conduits to support irrigation, water supply or for sewerage disposal, when provided to Government/Government undertakings would be for non-commercial, non-industrial purposes, even when executed under turnkey/EPC contractual mode and would fall within the ambit of clause (b), Explanation (ii) of Section 65 (105) (zzzza); and would consequently not be exigible to Service Tax, in view of the exclusion enacted in clause (b); and" 14. The larger Bench of the Tribunal held that the construction of canals/pipelines/conduits to support irrigation, water supply or for sewerage disposal, when provided to ....
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.... the case of M.C.I. Leasing (P) Ltd. v. Commissioner of Central Excise, Mysore, reported in 2014 (33) STR 497 (Kar.). In fact, the said decision would support the case of the assessee since it has been held in the decision that if the amount paid is not within the Act then the provision of the Act is not applicable. Admittedly, the amount which was paid by the assessee on a mistaken impression that the activity undertaken by them would attract service tax was not a payment under the Act and therefore, the question of Section 11B getting attracted would not arise. Identical issues arose for consideration before the High Court of Karnataka in the case of Commissioner of Central Excise (Appeals), Bangalore v. KVR Construction, reported in 2012 (26) STR 195 (Kar.). The Hon'ble Division Bench after noting several decisions held as follows: "23. Now we are faced with a similar situation where the claim of the respondent/assessee is on the ground that they have paid the amount by mistake and therefore they are entitled for the refund of the said amount. If we consider this payment as service tax and duty payable, automatically, Section 11B would be applicable. When once there was no com....