Mahalakshmi Infraprojects Ltd vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Original No. 14/ST/COMMR/KOP/2012 dated 30/07/2012 passed by Commissioner of Central Excise & Customs (Appeals), Mumbai)

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. C.J. Mathew, Member (Technical)

======================================================

1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

====================================================== Mahalakshmi Infraprojects Ltd. Appellant Vs. Commissioner of Central Excise, Kolhapur Respondent

Appearance: Shri V.B. Gaikwad, Advocate, for Appellant Shri S.R. Nair, E.O. (AR), for Respondent

CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical)

Date of Hearing : 28/09/2015 Date of Decision : 28/09/2015

ORDER NO

Per: M.V. Ravindran

This appeal is directed against Order-in-Original No. 14/ST/COMMR/KOP/2012 dated 30/07/2012.

2. Heard both sides and perused the records.

3. The issue involved in this case is taxability of the services rendered by the appellant under Erection, Commissioning and Installation Services; Site formation Services and GTA Services. The revenue is of the view that the activities of the appellants during the period 2005-06 to 2008-09 are taxable. The appellant had contested the matter before the adjudicating authority taking plea that contracts which are executed by them for the Maharastra Krishna Vali Development Corporation (MKVDC) is for the project of lift irrigation scheme including the job of designing, manufacturing, supply, irrigation, testing etc and with the said contracts executed by them was a works contract; as regards side formation services, it is the claim that under this, appellant has executed designing, fabrication and irrigation of pipe lines in respect of Hydro power project of Build operate and transfer basis at Sindhu Durg and is also under works contract; that it is in respect of the part and parcel of the job of dam which is erected at Sindh Durg; as regards GTA services it is his submission that the said demand of the tax liability stand discharged along with interest and prayer, is for non imposition of penalties.

4. On careful consideration of the submissions made by both sides, we find that as regards the service tax liability on the Erection Commissioning and Installation Services for MKVDC; the contract/work order is nothing but a works contract. The lower authorities have tried to vivisect the said works order and charge service tax liability under the erection commissioning and installation services which in our view is incorrect, the law has been settled by the Supreme Court in the case of CCE Vs. Larsen & Toubro Ltd. and others-2015 (8) TMI 749-SC. As regards the service tax liability under the category of Site Formation Services, we find that this issue is also now covered by the Larger bench decision of the tribunal in the case of Lanco Infratech Ltd & Others V/S. CCE, 2015-TIOL-768-CESTAT-BANG-LB wherein the Larger bench has settled the law as to laying of pipes/conduits for lift irrigation system undertaken for government/government undertakings and involving associated activities like soil preparation and filling, supporting masonry services gets classified as works contract, and is exempted from the service tax liability by the exemption granted in definition of Works Contract Services under section 65 (105) (zzza) of the Finance Act, 1994. In view of the forgoing, we find that the service tax liability and the interest thereof as confirmed by the adjudicating authority are unsustainable service tax liability needs to be set aside and we do so and appeal to that extent is allowed.

5. As regards the service tax liability under GTA services, we find that appellant is not seriously contesting the tax liability and has already discharged the tax liability and interest and the prayer is only for setting aside the penalties. We find that the appellant had discharged the tax under the head GTA services before the issuance of show cause notice and has also paid the interest due. In our view, the issue of taxability under GTA services is one of interpretation, hence appellant could have entertained a belief that the services are taxable in the hands of the transporters. Accordingly, we are on the view that the penalties imposed on the appellants on this count needs to be set aside by invoking the provisions of section 80 of the Finance Act, 1994. To that extent appeal is allowed partly.

6. The appeal is disposed of as indicated herein above and allow to that extend.

(Dictated in Court)

(C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial)

akp 1 4 APPEAL No.ST/697/12-Mum