2026 (6) TMI 708

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.... appeal against OIO dt.20.09.2011, vide Appeal No. ST/3146/2011 & M/s Jaiprakash-Gayatri Projects Pvt Ltd (JV) (hereinafter referred to as the appellant) are in appeal against OIO dt.20.09.2011, vide Appeal No. ST/3147/2011, whereby, the demand of Rs.5,85,96,046/- was confirmed along with penalty under section 76 & 77 of the Finance Act, 1994. 2. The issue, in brief, is that the appellants were awarded 5 work contracts by Irrigation & CAD Department, Government of Andhra Pradesh. The department felt that service tax is leviable on said activity as the contract is for execution of 'Turnkey projects, including engineering, procurement and construction or commissioning (EPC) projects', which falls under the category of 'Works Contract Servi....

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....d & Ors Vs CC, CE & ST, Hyderabad (supra), the Larger Bench examined all contentions raised, in regard of which issues relating to EPC contract as well as canals were also examined. The judgment of the Larger Bench insofar as it relates to issue of construction of canal for irrigation or water supply as well as Turnkey/ EPC project is at para 21 of the said order, which is cited below for ease of reference. "21. In the light of the foregoing analyses, we record our conclusions on the several issues framed, as follows: (a) Issue (A) : Laying of pipelines/conduits for lift irrigation systems for transmission of water or for sewerage disposal, undertaken for Government/Government undertakings and involving associated activiti....

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....), Section 65(105)(zzzza). The bundled bouquet of services provided as turnkey/EPC contract, classifiable as Commercial or Industrial Construction Service (CICS) prior to 1-6-2007, would be classifiable under clause (b), Explanation (ii), Section 65(105)(zzzza) on and from 1-6-2007 and would not be exigible to Service Tax if the rendition of service thereby is primarily for non-commercial, nonindustrial 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 pre-ex....