Cestat, Mumbai bench
Commissioner of Central Excise, Raigad
ORDER NOs. S/387/2012/CSTB/C-I & A/184/2012/CSTB/C-I
APPLICATION NO. ST/S/899 OF 2011
APPEAL NO. ST/334 OF 2011-MUM
FEBRUARY 23, 2012
Ashok Jindal, Judicial Member
The appellants are in appeal along with a stay application against the confirmation of demand under Erection, Commissioning or Installation Service (ECIS) under Section 65 of the Finance Act.
2. The facts of the case are that during the course of scrutiny of the records, it was found that that the appellants are registered as Government Civil Contractor and engaged in the activity of providing, lowering and laying of sewerage and water supply pipeline including construction of chambers, operation, maintenance and repair work to water supply distribution network, underground drainage work etc. to various Government bodies. A show-cause notice was issued to the appellants demanding service tax on the ground that the appellants are providing Erection, Commissioning or Installation Services, Transport of goods by Road services, Work Contract Services, Site Preparation/formation and clearance, excavation and earthmoving and demolition services, maintenance or repair services to their customer. Thereafter, the demand was confirmed under the category of Goods Transport Agency Services. Aggrieved by the impugned order, the appellants are before us.
3. After hearing both sides in detail, we find that the appeal itself can be disposed. Therefore, after granting waiver of pre-deposit, we take up the appeal itself for final disposal.
4. The learned Counsel for the appellants submits that the activities undertaken by them is not covered under the ECIS as held by this Tribunal in the case of Indian Hume Pipe Co. Ltd. v. CCE  16 STT 136 (Chennai – CESTAT) wherein this Tribunal held that “Erection, Commissioning or Installation Service – Water supply system -Construction of pipeline undertaken – Erection connotes construction or building of structure and laying of pipeline not involves erection -Installation applicable to machinery already made and setting up such machinery ready for use – Commissioning involves operationalisation of machinery – Erection not involved in digging earth and laying long distance pipeline – Pipeline not covered under the expression ‘plant -Water supply project being infrastructure facility and civic amenity provided by State in public interest, not an activity of commerce or industry – Laying of pipeline not covered under impugned service – Sections 65(39a) and 73 of Finance Act, 1994.” Therefore, the demand on account of Erection, Commissioning or Installation Services is not sustainable. He further submitted that the demand on account of GTA services is confirmed against them without giving them abatement as per Notification No. 32/2004 wherein the appellants are entitled for seventy five per cent abatement of the total amount of GTA received by them.
5. We have carefully gone through the submissions made by the learned Counsel and following the decision in the case of Indian Hume Pipe Co. Ltd. (supra) wherein this Tribunal has held that “water supply project is an infrastructure facility and a civic amenity which the State provides in public interest and not an activity of commerce or industry. Therefore, the appellants are not covered under the category of Erection, Commissioning or Installation Services.” Following the precedent decision in the case of Indian Hume Pipe Co. Ltd. (supra), we hold that the activities undertaken by the appellants does not cover under the category of Erection, Commissioning or Installation Services. Accordingly, we set aside the demand on this account in the impugned order.
6. Further, as per the Notification No. 32/04 the appellants are entitlement for seventy five per cent abatement received under GTA services. Therefore, we allow the appeal on this account. At this stage it is pointed out by the learned Counsel that they have already paid the service tax on twenty five per cent of the amount paid as GTA service by claiming abatement as per Notification No. 32/2004. If at all there is any difference in computation of demand, the same shall be communicated to the appellants within 15 days which the appellants shall pay within 30 days of the communication.
7. Appeal as well as stay application are disposed of.