Custom, Excise & Service Tax Tribunal
Water Resources Department vs Nashik on 31 January, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: ST/714/2012
[Arising out of Order-in-Original No: 04/ST/2012 dated 27/08/2012 passed by the Commissioner of Central Excise, Customs & Service Tax, Nashik.]
For approval and signature:
Honble Shri P.R. Chandrasekharan, Member (Technical)
Honble Shri Anil Choudhary, Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
The Executive Engineer (Mechanical)
Water Resources Department
Appellant
Vs
Commissioner of Central Excise, Customs & Service Tax
Nashik
Respondent
Appearance:
Shri Nitin Deshpande, Advocate for the appellant Shri S.G. Dewalwar, Addl. Commissioner (AR) for the respondent CORAM:
Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) Date of hearing: 31/01/2014 Date of decision: 31/01/2014 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
The appeal is filed against Order-in-Original No: 04/ST/2012 dated 27/08/2012 passed by the Commissioner of Central Excise, Customs & Service Tax, Nashik.
2. The appellant is the Chief Engineer (Mechanical), Water Resources Department of the Government of Maharashtra. The appellant undertook erection of various types of gates and hoses for the dams constructed in various districts of Maharashtra, such as, Amravati, Akola, Washim, Yavatmal, Buldhana districts for the Vidharbha Irrigation Development Corporation, Tapi Valley Irrigation Development Corporation and Krishna Valley Development Corporation. The department was of the view that the appellant was liable to pay service tax on these activities under the category of Erection, Commissioning and Installation Service and accordingly confirmed demand of ` 2,41,68,577/- for the period 01/04/2006 to 31/03/2011 along with interest thereon and also imposed penalties under Sections 76, 77 and 78 of the Finance Act, 1994 under the aforesaid order. It is against this order, the appellant is before us.
3. The learned counsel for the appellant submits that the appellant is Government department and they have undertaken the work of erection of sluice gates for the dams constructed by the aforesaid Corporations which are also statutory corporations of the Government of Maharashtra. They are not a commissioning and installation agency envisaged under Section 65(29) of the Finance Act, 1994 and they are not rendering service to anybody else except to themselves i.e. the Government of Maharashtra. Both the provider of service and recipient of the service are part and parcel of the Government of Maharashtra and, therefore, service to self cannot be considered s a taxable service. Accordingly, he pleads for grant of stay against the impugned demands.
4. The learned Addl. Commissioner (AR) appearing for the Revenue reiterates the findings of the lower authorities.
5. We have carefully considered the rival submissions. The activity undertaken by the appellant is of erection of sluice gates in the agricultural dams constructed by the various corporations. Section 65(39a) defines erection, commissioning and installation service as erection, commissioning of installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise or installation of items such as electrical and electronic devices, plumbing, drain laying, thermal insulation, sound insulation, fire prevention, lifts and escalator, fire escape escape staircases or travelators. Section 65(105)(zzd) defines a taxable service as a service rendered to any person by a commissioning and installation agency in relation to erection, commissioning and installation. The Chief Engineer, Water Resources Department of the Government of Maharashtra is not a commissioning and installation agency as they do not undertake these activities for anybody else except themselves. Further, the erection and commissioning or installation should be in relation to plant, machinery, equipment or structures. As clarified by CBEC vide circular No. 790/09/2004 dated 17/09/2004 erection of structures referred to therein means civil works to installation/ commissioning of a plant and machinery. Agricultural dam or sluice gates thereto cannot be considered as a plant and machinery or equipment or structures thereof. They are in the nature of infrastructural construction catering to the needs of agriculture. They are excluded from the purview of service tax levy both under the category of commercial and industrial construction service and Works Contract services specifically.
6. In view of the above analysis, we find that the activity undertaken by the appellant falls outside the purview of service tax, and therefore, the appellant is not liable to pay any service tax. Accordingly, the appeal is allowed.
(Dictated in Court) (Anil Choudhary) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 5