Custom, Excise & Service Tax Tribunal
) M/S. Mackintosh Burn Ltd vs Commissioner Of Customs, Central ... on 13 February, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH: KOLKATA
1) APPEAL NO. ST/A/366/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
2) APPEAL NO.ST/A/499/11
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.09/2011 DATED 12.8.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
3) APPEAL NO. ST/A/15/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.16/2011 DATED 20.9.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
4) APPEAL NO. ST/A/424/11
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG/05/2012 DATED 6.7.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
5) APPEAL NO. ST/A/554/11
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLOLNG NO.16/2011 DATED 20.09.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
6) APPEAL NO. ST/A/555/11
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.16/2011 DATED 20.9.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
7) APPEAL NO.ST/A/342/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
8) APPEAL NO.ST/A/343/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
9) APPEAL NO.ST/A/344/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONTG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
10) APPEAL NO.ST/A/345/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
11) APPEAL NO.ST/A/362/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
12) APPEAL NO. ST/A/558/11
(ARISING OUT OF ORDER-IN-ORIGINAL NO.ST/SHILLONG/16/2011 DATED 20.9.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
13) APPEAL NO.ST/A/560/11
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.16/2011 DATED 20.9.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
14) APPEAL NO.ST/A/370/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
15) APPEAL NO.ST/A/371/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
16) APPEAL NO.ST/A/372/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
17) APPEAL NO.ST/A/224/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
18) APPEAL NO.ST/A/225/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
19) APPEAL NO. ST/A/286/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
20) APPEAL NO.ST/A/337/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
21) APPEAL NO.ST/A/338/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
22) APPEAL NO.ST/A/339/12
(ARISING OUT OF ORDER-IN-ORIGINAL NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
23) APPEAL NO.ST/A/340/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
24) APPEAL NO.ST/A/381/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
25) APPEAL NO.ST/A/364/12
(ARISING OUT OF ORDER-IN-ORIGINAL NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
26) APPEAL NO.ST/A/401/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
27) APPEAL NO.ST/A/71326/13
(ARISING OUT OF ORDER-IN-APPEAL NO.24/SH/CE(A)/GHY/2013 DATED 12.08.2013 PASSED BY COMMISSIONER OF CENTRAL EXCISE (APPEALS), GUWAHATI)
28) APPEAL NO.ST/A/402/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
29) APPEAL NO.ST/A/75034/13
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.08/2012 DATED 22.11.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
30) APPEAL NO.ST/A/386/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
31) APPEAL NO.ST/A/506/11
(ARISING OUT OF ORIGINAL-IN-ORIGINAL/ST/SHILLONG NO.09/2011 DATED 12.8.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
32) APPEAL NO.ST/A/508/11
(ARISING OUT OF ORDER-IN-ORIGINAL ST/SHILLONG NO.09/2011 DATED 12.8.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
33) APPEAL NO.ST/A/509/11
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.09/2011 DATED 12.8.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
34) APPEAL NO.ST/A/505/11
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.09/2011 DATED 12.8.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
35) APPEAL NO.ST/A/559/11
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.16/2011 DATED 20.09.2011 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
36) APPEAL NO.ST/A/365/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
37) APPEAL NO.ST/A/2/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.16/2011 DATED 20.09.2011 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
38) APPEAL NO.ST/A/392/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 8.5.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
39) APPEAL NO.ST/A/70704/13
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.05/2013 DATED 31.03.13 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
40) APPEAL NO.ST/A/70890/13
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.05/2013 DATED 31.03.13 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
41) APPEAL NO.ST/A/354/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 08.05.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
42) APPEAL NO.ST/A/356/12
(ARISING OUT OF ORIGINAL-IN-ORIGINAL/ST/SHILLONG NO.09/2011 DATED 12.8.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
43) APPEAL NO.ST/A/357/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.16/2011 DATED 20.9.11 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
44) APPEAL NO.ST/A/358/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 08.05.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
45) APPEAL NO.ST/A/359/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 08.05.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
46) APPEAL NO.ST/A/360/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 08.05.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
47) APPEAL NO.ST/A/363/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 08.05.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
48) APPEAL NO.ST/A/348/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 08.05.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
49) APPEAL NO.ST/A/391/12
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.06/2012 DATED 08.05.12 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
50) APPEAL NO.ST/A/75597/14
(ARISING OUT OF ORDER-IN-APPEAL NO.19/GHY/CE(A)/GHY/2014 DATED 29.01.14 PASSED BY COMMISSIONER, CUSTOMS & CENTRAL EXCISE (APPEALS), GUWAHATI)
51) APPEAL NO.ST/A/70961/13
(ARISING OUT OF ORDER-IN-ORIGINAL/ST/SHILLONG NO.05/2013 DATED 31.03.13 PASSED BY COMMISSIONER OF CENTRAL EXCISE, SHILLONG)
FOR APPROVAL AND SIGNATURES OF
DR. D.M.MISRA, HONBLE JUDICIAL MEMBER
DR. I.P.LAL, HONBLE TECHNICAL MEMBER
1. Whether Press Reporters may be allowed to see :
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 :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not ?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities ?
1) M/S. MACKINTOSH BURN LTD.
2) M/S. ENGINEERS PR0JECTS (I) LTD.
3) M/S. ENGINEERING PR0JECTS (INDIA) LTD.
4) M/S. SHIBU SAHA
5) M/S. BANDANA DEB BARMA
6) M/S. PARIMAL CHANDRA LODH
7) M/S. SISIR RANJAN BHOWMIK
8) M/S. MOHANLAL SINGHA
9) M/S. DIPEN ROY
10) M/S. PARIMAL GHOSH
11) M/S. SWAPAN DEY
12) M/S. SHIBU SAHA
13) M/S. CHINMOY SAHA
14) M/S. CHINMOY SAHA
15) M/S. UTPAL DUTTA
16) M/S. SIBU SAHA
17) M/S. JAICHAND LAL SINGHI
18) M/S. SHREE GAUTAM CONSTRUCTION CO. LTD.
19) M/S. J.C.CORPORATION
20) M/S. PRABODH KUMAR BANIK
21) M/S. CHANDAN SENGUPTA
22) M/S. SUBHAS CHANDRA PODDAR
23) M/S. SUNIL SAHA
24) M/S. NATIONAL PROJECTS CONSTUCTION CORPORATION LTD.
25) M/S. BENGAL PRAKALPA NIRMAL PRIVATE LIMITED
26) M/S. A.KRISHNA REDDY
27) M/S. NATIONAL PROJECT CONSTRUCTION
28) M/S. RABIN SINGHA HEAVY EARTH MOVERS CO.(P) LTD.
29) M/S. NATIONAL PROJECTS CONSTRUCTION CORPORATION LIMITED
30) M/S. TAMCHI KUSUK
31) M/S. L.R.M. & SONS
32) M/S. L.H.ENTERPRISES
33) M/S. L.T.R.CONSTRUCTION
34) M/S. A.B.C.I. INFRASTRUCTURE
35) M/S. ROY MITRA ENTERPRISE
36) M/S. ROY MITRA ENTERPRISE
37) M/S. A.B.C.I. INFRASTRUCTURE
38) M/S. DEECON INDIA (P) LTD.
39) M/S. ROY MITRA ENTERPRISE
40) M/S. DEECON INDIA (P) LTD.
41) M/S. CLT CONSTRUCTION
42) M/S. SUPRADA CONSTRUCTION COMPANY
43) M/S. SUPRADA CONSTRUCTION COMPANY
44) M/S. SUPRADA CONSTRUCTION COMPANY
45) M/S. SHREE MAKUMBIKA BUILDERS
46) M/S. SUPRADA CONSTRUCTION COMPANY
47) M/S. CEC PROJECTS PVT. LTD.
48) M/S. N.G.BHATTACHARJEE
49) M/S. ASHUTOSH BANDOPADHYAYA
50) M/S. KDP CONSTRUCTION PVT. LTD.
51) M/S. ROY MITRA ENTERPRISES
APPLICANT(S)
VERSUS
COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, SHILLONG
...RESPONDENT (S)
APPEARANCE:
SHRI KARTIK KURMY, ADV. ASSISTED BY SHRI ANAND JALUKA, ADV.FOR THE APPELLANTS AT SL. NOs.(1-3); SHRI SUSHIL KUMAR GOYAL, CA FOR THE APPELLANT AT SL. NO.(4);
SHRI K.P.DEY, ADV. FOR THE APPELLNTS AT SL. NOs.(5-11);
SHRI VINAY KUMAR SARAFF, CA FOR THE APPELLANTS AT SL. NOs.(12-16);
SHRI DEVRAJ SAHU, ADV. FOR THE APPELLANTS AT SL. NOs.(17-19);
SHRI NIHAR DASGUPTA, ADV. FOR THE APPELLANTS AT SL. NOs.(20-23);
SHRI SUVENDU BANERJEE, ADVOCATE ASSISTED BY SHRI ARUP CHAKRABORTY, ADV. AND SHRI AVRA MAJUMDAR, ADV. FOR THE APPELLANTS AT SL. NOs.(24-29); SHRI ARUN AGARWAL, CA FOR THE APPELLANT AT SL. NO.(30);
SHRI A.D.ROY, ADVOCATE FOR THE APPELLANTS AT AS SL. NOs.(31-33);
SHRIMATI SWAPNA DAS, ADVOCATE ASSISTED BY SHRI SIDHARTH DAS, ADV. FOR THE APPELLANTS AT SL. NOs.(34-40); SHRIMATI SHRUTI PRADHAN, FCA FOR THE APPELLANTS AT SL. NOs.(41-47);
SHRI A.C.TIKADAR, CONSULTANT FOR THE APPELLANTS AT SL. NOs.(48-49);
SHRI SANJIB DAS, FCA FOR THE APPELLANT AT SL. NO.(50);
SHRI GAUTAM BANERJEE, CA FOR THE APPELLANT AT SL. NO.(51);
AND SHRI A.K.RAHA, SPECIAL COUNSEL FOR THE REVENUE.
CORAM:
DR. D.M.MISRA, HONBLE JUDICIAL MEMBER DR. I.P.LAL, HONBLE TECHNICAL MEMBER Date of Hearing: 15 & 16.10.2014 Date of Decision: 13.02.2015 ORDER NO.FO/A/75044-75094/15 Per Dr. D.M.Misra The aforesaid Appeals are filed against respective Orders-in-Original passed by Commissioner of Central Excise, Shillong and Order-in-Appeal passed by Commissioner of Central Excise (Appeals), Guwahati. Since the issues involved in all these Appeals are common, accordingly, these are taken up together for disposal.
2. Briefly stated the background facts are that the Ministry of home affairs entered into Memorandum of Understanding (MoU) with govt. agencies viz. M/s EIL and M/s NPCC for construction of Border Outposts (BOP). In the said agreements/MoUs, EIL and NPCC were described as executive agencies and for carrying out the said work, the executive agencies were entitled to 10% of the project cost as their charges/fees. The executive agency, in turn, floated tenders and appointed qualified contractors/sub-contractors for execution of the said job of construction of border outpost. The service tax Department, issued demand notices to the executive agencies as well as to the contractors/sub contractors, demanding service tax under the category of erection, commissioning or installation service as defined under Sec. 65(39a) read with Sec. 65(105)(zzd)of the Finance Act, 1994. On adjudication, the demand notices have been confirmed and penalties imposed on the respective appellants by the adjudicating authority and in one case the appeal carried out by the appellant against the order of additional Commissioner which was rejected by the ld. Commissioner (Appeals). Aggrieved by these orders the appellants preferred the present appeals before this forum. For understanding the issues, instead of narrating the facts of each of the Appeals, it would suffice to discuss the facts mentioned in Appeal No.ST/A/366/12 filed by M/s. Mackintosh Burn Ltd. & M/s NPCC.
3. M/s. Mackintosh Burn Ltd., during the relevant period i.e.2007-08 to 2009-10, were issued work Order by M/s. National Project Construction Corporation Ltd., Silchar (NPCC Ltd.), for construction of Border Out Posts (BOP) for Border Security Force (BSF) and road along Indo-Bangladesh Border under packages MZ-18, MZ-19, MZ-L3 and MZ-L5 in the State of Mizoram. Broadly, under the work Orders, the contractors were required to supply tools, plants etc. as required for the said Project; besides the job comprises of clearing of jungles, vegetation, grasses, trees, removal of rubbish, preparation of sub-base by excavating earth, dressing of camber consolidated with road-roller, providing (supplying) and fixing of security fencing with posts and barbed wire, by supplying cement, sand, grit-bricks and by carrying out the foundation work, pavement work, centering, shuttering, providing(supplying) and fixing of gate etc..
4. Show cause-cum-demand notice for Rs.45,34,434/- towards Service Tax was issued on 13.06.2011 for the period, 2007-08 to 2009-10, alleging that the activity of construction of border-fencing with road along Indo-Bangladesh Border, is chargeable to service tax under the category Erection, Commissioning or Installation Services, as defined under section (39a) read with Section 65(105)(zzd) of the Finance Act, 1994. The ld. Commissioner has confirmed the demand and imposed penalty equivalent to the service tax, under Section 78 of the Finance Act, 1994, and also penalty of Rs.5,000/- under Section 77 of the said Act.
5. Ld. Advocate Shri Kartik Kurmy for the Appellant, M/s. Mackintosh Burn Ltd., assailing the impugned Order, has submitted that the activities carried out by the Appellant, cannot come under the scope of Erection, Commissioning or Installation Services, as defined under Section 65(39a) read with Section 65(105)(zzd) of the Finance Act, 1994. It is his submission that the activity of Erection alone would not fall under the scope of the said service tax entry of Erection, Commissioning or Installation Services. He has submitted that in the impugned Order, the ld. Commissioner has categorically held that the essential character of the services rendered by the Appellant, is that of erection, therefore, the services/work rendered/undertaken under the Contract ought to be considered as the service of civil construction falling within the scope of the taxable entry of Commercial or Industrial Construction Service as defined under Section 65(25b) read with Section 65(105)(zzq) of the Finance Act, 1994. It is his submission that since the services rendered by the Appellant, are non-commercial in nature, therefore such construction services are excluded from the scope of the taxable Entry, Commercial or Industrial Construction Services.
6. Elaborating his argument, he has referred to the meaning of the term, Erection, Commissioning, Installation, mentioned under various dictionaries. It is his submission that on a plain reading of the dictionary meaning of these words, it could be discerned that these words standing alone could not be considered as rendering of the services of erection, commissioning or Installation. Thus, the conjunction OR contained in the said definition of erection, commissioning or installation, be read as AND, so as to bring the said activities under the scope of the said service of Erection, Commissioning or Installation Services.
7. He drew support to the aforesaid argument from Boards Circulars bearing No.80/10/204-ST dated 17.09.2004 and 123/5/2010-TRU dated 24.05.2010. It is his contention that in both the circulars, while clarifying the doubts raised from time to time, whether certain activities would come under its scope, it is stated that to bring an activity/service under the scope of Erection, Commissioning or Installation Service, it is quite essential that all the three activities must be carried out under a composite contract. In the present case, since the Appellant had only carried out the activity of Erection, therefore the construction of Boarder Outposts(BOP) for fencing the border would not come within the definition of Erection, Commissioning or Installation Services. He submits that the said circulars are binding on the Department and in support, he has referred to the judgments of the Honble Supreme Court in the case of CCE vs. Dhiren Chemical Industries Ltd., 2002(139) ELT 3(SC) and in the case of Paper Products Ltd. vs. CCE, 1999(112)ELT 765(SC). Also, he has submitted that the Circulars issued by the Government, should be considered as an external aid in construction of a statute in view of the judgement of Honble Supreme Court in the case of CCE vs. Parle Exports P. Ltd., 1988(38) ELT 741(SC) and in the case of CTT vs. Kajaria Ceramics, 2005(191) ELT 20(SC).
8. Further, the Ld. Advocate has submitted that in the present context of the meaning erection, commissioning or installation the word OR if construed to have been used as disjunctively and is not read as AND, the activity of Erection involves and refers to civil work/construction, accordingly the said activity would not be covered under Section 65(39a) only, but also under Section 65(25b), of the Finance Act, 1994, i.e. Commercial or Industrial Construction Services, which could not have been the intention of the legislature to bring the same services under two different entries. The legislature must not have created a new category for the same activity, which is already taxable under the existing entry of Construction Services. It is a settled law that there is a presumption against redundancy and the words are not used by the legislature without any purpose. Further, he has argued that the activities referred to in the definition of Erection, Commissioning or Installation Services, are not in the alternative, but cumulative in nature, and if any one of the aforesaid activities is undertaken, then the conditions contained in the definition of the category, Erection, Commissioning or Installation Services, would not be satisfied.
9. The ld. Advocate also argued that the Structure mentioned under clause (i) of the definition of erection, commissioning or installation service refers to mechanical/technological structure only and not civil structure. Civil structures are covered under Construction Service. The aforesaid conclusion can be reached by applying the broad principles of Noscittur a Sociis, as the meaning of structure under clause (i) to be read in the context and the company of words, where it appears. The word, Structure, read in the cognate sense and keeping in mind the company it keeps, would draw its colour from its companion, which is covered under clause (i) of Section 65(39a) of the Finance Act, 1994 and not civil structures covered under the scope of Section 65(25b) of the said Act, which deals with immovable properties only. Further, rebutting the contention of the Department that under clause (ii) of Section 65(39a) of the said Act, plumbing, drain-laying or other installations are covered, hence the activities thereunder, are not only confined to plant, machinery, equipment etc., but it would include civil structure also. The ld. Advocate further submits that the installation like plumbing, drain-laying or similar such installation under sub-clause (b) of clause (ii) of the said Section, is not meant for discharge of rain-water/waste water, as is understood in the common parlance, but for transmission of fluid, the said Section ought to be read in the context of plant, machinery and equipment. Further, he has argued that the services rendered by the Appellant are Construction Services being not Commercial Construction, therefore, not leviable to service tax.
10. Countering the contention of the Department that since the Appellants had been operating and rendering the services with profit motive, hence the services provided by them, be considered as Commercial, the ld. Advocate submitted that the services provided could have been acted with profit motive, but the Construction namely, border-fencing, is not meant to be used or occupied for commercial purpose. Therefore, the use of the words, Erected Structure, is irrelevant, rather than making the use the word, Construction which was undertaken by the contractors. In support, he has submitted that it has been held by the Honble Supreme Court in the case of All India Federation of Tax Practitioners vs. UOI, 2007(7)STR 625(SC) that service tax is a VAT and is leviable on Commercial Services only, and is destination-based consumption tax. Further, he has referred to the decision of this Tribunal in the case of Lalit Constructions vs. CCE, 2012(27) STR 138(Tri.), wherein it has been held that the activity relating to infrastructure facility and civil amenity provided by State in public interest, is not an activity for commerce or industry and hence, such activity is not covered under the category, Erection, Commissioning or Installation Service. Similar view was also expressed in the case of Indian Hume Pipe Co. Ltd. vs. CCE, 2008(12) STR 363(Tri.). He also referred to the Circular No.123/5/2010-TRU dated 24.05.2010, wherein it has been clarified that the nature of services which are excluded from the purview of Construction Services (i.e. non-commercial constructions) under Section 65(25b) of the Finance Act, 1994, and also excluded from the purview of Works Contract Services under Section 65(105)(zzzza) of the said Act.
11. Further, the ld. Advocate submitted that the Applicant Company is a public sector undertaking owned by the Government of West Bengal; hence, there cannot be any suppression of facts with intent to evade payment service tax, warranting invocation of the extended period of limitation and imposition of penalty. In support, he has also referred to the decisions of the Tribunal in the case of CCE vs. Nepa Ltd., 2013(298) ELT 225(Tri.) and U.P.State Sugar & Cane Development Corporation Ltd. vs. CCE, 2009(242) ELT 260(Tri.). Further, he has submitted that the Ministry of Home Affairs, Department of Border Management, vide its letter dated 06.02.2012, had clarified that the activity of border-fencing is covered under the Centrally Sponsored Scheme (CSS) and directly implemented by the Central Government/State Government Agencies. The Finance Ministry, vide its letter F.No.137/39/2010-CX-4 dated 25.03.2010 addressed to the Ministry of Home Affairs, had opined that the activity of border-fencing is taxable under Section 65(39a) of the Finance Act, 1994.
12. Arguing for M/S. Engineering Projects (India) Ltd., the executing Agency, the Ld. Adv. has submitted that under the MoU, the Appellant were required to carry out (i) Detailed survey of the plot of land etc.; (ii) Finalization of alignment in consultation with BSF/DM; (iii) Executing work as an Executing Agency; (vi) Rectification of defects during defect liability period etc.; and (viii) Liaisoning with State Government/Local Authorities for land acquisition, forest environment clearance etc. Consequently, M/s EIL had floated and awarded Works Contracts to different contractors for construction of border road and fencing along the Indo-Bangladesh Border on behalf of the MHA. The ld. Advocate submits that under the said MoU, the Appellant did not carry out the activities of construction themselves. Under the contracts entered into with various contractors, respective contractors were obliged to carry out (i)Earth work; (ii)Road work; (iii)Making culvert etc.; and (iv) Border fencing etc. It is submitted that the contracts awarded to the contractors were indivisible, which consisted of provision of Construction Services and supply of goods. In the execution of such Works Contracts, there was an involvement of transfer of property in regard to goods, which were subjected to VAT. The Appellant were directed to pay service tax on the entire activity under the category, Erection, Commissioning or Installation Services, on the ground that fence is a structure and Erection of Fence amounts to Erection of Structure taxable with effect from 16.05.2006. The Ld. Adv. has submitted that the executing agency themselves had not carried out the tangible services of construction of road and border fences; but the activities were carried out by the contractors and not M/S EIL. They entered into the scene before the tangible services commenced, and after the services were over, their role as an Executing Agency, limited to supervision of the works of the contractors. The ld. Advocate submitted that the Appellant were appointed as an independent consultant by the MHA for carrying out the aforesaid services against a commission @ 10% of the total cost of the works. In the present case, the total commission was wrongly subjected to service tax under the category, Erection, Commissioning or Installation Services. He also contended that since the Appellant Company is a PSU owned by the Central Government and the contract in question was entered into between two Ministries of the same Government (Central Government); therefore, there cannot be any suppression of facts with intent to evade payment of service, warranting invocation of the extended period of limitation and imposition of penalty.
13. The Ld.Advocate Mr.Saraf appearing for the Appellants (Appeal No.ST-558/11, ST-560/11, ST-370/11, ST-371/11 AND ST-372/11) has submitted that it is a settled position of law that when a taxing statute does not define a term then it has to be interpreted in accordance to its meaning as understood in common parlance. In support, he has referred to the decisions of Honble Supreme Court in the case of CCE, New Delhi vs. Connaught Plaza Restaurant (P) Ltd. 2012 (286) ELT 321(SC), Naturalle Health Products (P) Ltd. v. CCE, Hyderabad 2003 (158) ELT 257(SC), Commissioner of Trade Tax, UP vs. Kartos International 2011 (268) ELT 289 (SC), CCE, Hyderabad vs. Fenoplast (P) Ltd. (II) 1994 (72) ELT 513(SC), Dabur India Ltd. vs. CCE, Jamshedpur 2005 (182) ELT 290(SC). Also he has referred to a circular of the CBEC bearing No.57/2003-CUS dated 27.6.2003 where it is verified that if a taxing statute does not define a term it has to be interpreted in accordance with the meaning of the term In common trade parlance. In view of the aforesaid principle of law, the word structure since not been defined in the Finance Act, 1994, hence its meaning should be understood in the sense it is used by the people in the trade. Further, he has submitted that the expression erection, commissioning and installation is being used by the trade in relation to erection, commissioning and installation of plant and machinery and it is not used in relation to fencing of structure. Further referring to para 14 of the Circular dated 17.09.2004, he has submitted that erection would refer to the civil works of installation/commissioning of a plant or a machinery.
14. Further referring to the principle of interpretation of statutes, namely, ejusdem generis he has submitted that the said principle of interpretation has been ignored in the impugned order while classifying the services of border fencing under the category of erection, commissioning and installation service. He has submitted that clause (i) of section 65(39a) covers erection, commissioning and installation of plant, machinery or structures whether pre-fabricated or otherwise. The meaning of the word structure should take its colour from preceding words plant and machinery, it cannot be used to mean structures standing in isolation. In support he has referred to the judgement of Honble Supreme Court in the case of Siddeshwari Cotton Mills Ltd. vs. Union of India 1989 (39) ELT 498(SC). Further referring to the judgement of the Bangalore Bench of the Tribunal in the case of Amanulla Khans Sons vs. CCE, Bangalore 2012 (28) STR 508(Tri.-Bang.) he has submitted that the term structure appearing in the amended definition of erection, commissioning or installation service should be understood ejusdem generis with the term plant, machinery, structure. Further, on analysis of clause (ii) of section 65(39A) the Ld. Chartered Accountant submitted that specific activities in addition to plant and machinery has been added from time to time under this category and therefore it cannot be conceived that an activity of national interest like border fencing is shrouded within the word structure. Had it been the intention of the legislature, to bring structure within the definition of erection, commissioning or installation, the same would have specifically incorporated in the said definition. He has also submitted that the nature of services rendered by the individual appellant-contractors have been ignored and classification of the services rendered by all the contractors had been done on the basis of the main project ignoring individual nature of services. He has submitted that all these appellant-contractors had not rendered the services of construction of fencing. For example Mr. Chinmoy Saha (Appeal No.ST-560/11) have only carried out construction of RSCC tags, bridges, Mr.Sibu Saha (Appeal No.ST-372/12) have undertaken only construction of roads. Thus these activities are clearly classifiable under the category of commercial or industrial construction and not taxable. Further, he has submitted that extended period of limitation cannot be invoked in the present case as the issue involved is interpretation of law.In support he has referred to the decision of Honble Supreme Court in the case of Uniflex Cables Ltd. vs. CCE, Surat-II 2011 (271) ELT 161(SC).
15. The ld. Advocate, Smt.Shruti Pradhan, appearing for the Appellants, M/s Suprada Industries Ltd. (Appeal Nos.ST-357/12, ST-358/12, ST-354/12 & ST-360/12), submitted that the Appellants have been awarded the job by the National Project Construction Corporation Ltd. ( M/s NPCCL), who was an executing Agency for construction of border fencing at different location along the Indo-Bangladesh Border. Consequently, NPCCL had floated trader and awarded works to the Appellants for construction of border fencing along with Indo Bangladesh Border of Tripura, which included composite work of fencing, road on existing ground, link road on embarkment, construction of pipe culvert, foot track on raised ground, earth work in cutting & filling for leveling. She has more or less subscribed to the arguments of the ld. Advocate, Shri Kurmy, that the activity of erection standing alone, is a construction activity and when it involves a composite contract of erection, commission and installation in relation to the service/ activity, would come within the scope of the said taxable service. In relation to Appeal No.ST/360/12, she has submitted that the contracts awarded the Appellant, were only for construction of road, which is evident from the Work Order issued to them. She has further submitted that the Border Fencing work has been carried out involving Ministry of Home Affairs and NPCCL, therefore, allegation of suppression of facts is un-founded and accordingly, the demand notices are barred by limitation.
16. Similar line of arguments are also advanced by the Ld. Advocate for the Appellants, namely, M/s CLT Construction (Appeal No.ST/354/12), M/s CEC Projects Pvt. Ltd. (Appeal No.ST/363/12), M/s Shree Makumbika Builders (Appeal No.ST/359/12) & M/s B. T. Construction (Appeal No.ST/507/12). In relation to M/s B. T. Construction, the ld. Advocate, submitted that even though the Work Order was initially issued for Rs.745.00 lakhs by M/s Engineering Project India Ltd. (EPIL), the Appellants carried out the work for Rs.293.12 lakhs requested for closure of the contract. Therefore, it is her submission that the confirmation of demand against the entire amount mentioned in the work order, is bad in law.
17. The ld. C.A., Shri J.N. Banerjee, appearing for the Appellant, M/s R.K.Grover & Company (Appeal No.ST/70961/13-DB), submitted that the word fencing & railing have been used separately in Clause 65(25b) of the Finance Act, 1994, though in a different context, but in relation to the civil structure. It is his submission that if the legislature intended to include fencing and railing within the meaning of structure, then it would have been necessary to mention fencing and railing separately in Clause 65 (39a) and it would have been referred to civil structure of all kind to include fencing and railing within its scope, which clearly demonstrate that the law did not equate structure for fencing and railing or vies-versa. Referring to the dictionary meaning of the word Fencing, the Ld. Chartered Accountant submitted that none of the meanings prescribed in dictionaries, fencing has been described a structure or anything akin to a structure. It is his submission that the ordinary meaning of fencing cannot be structure. Therefore, even if few dictionaries refer to fencing as structure, the benefit of doubt on its meaning should be in favour of the tax payer. In any sense, fencing is never referred to as a structure and structure essentially means a large opaque edifice or building for machinery where fencing is not. Similarly, referring to the meaning of word structure in various dictionaries, the Ld. Advocate submits that structure does not include fencing. Structure essentially means and refers to a complex edifice, entity, construction, building plans or even human body. Further, he has submitted that Border Fencing work carried out by Ministry of Home Affairs at different parts of India including international borders like Indo-Bangladesh, Assam-Bangladesh and Western states like Jamika, Punjab and Rajasthan, Gujrat with Pakistan, the fencing work has not been subjected to levy of Service Tax on the concept that this is commercial and industrial work and hence not taxable service. If Service Tax is levied only for fencing work in the region Meghalaya and Tripura which would give rise to discrimination.
18. The Ld. C.A. subsequently submitted a letter dated 3rd December, 2014 obtained from NBCC under RTI Act wherein it is informed that service tax has not been charged directly or through contractors bills or paid by NBCC for Indo-Pak International fencing works for the Financial year 2006-07 to 2009-10. Further, he has submitted that the demand is barred by limitation as there has been no suppression, concealment on the part of the appellant.
19. The Ld. Advocate Shri K.P. Dey appearing for the appellants Smt. Bandana Dev Verma (Appeal No. ST/554/11), Shri Parimal Chandra Lodh (Appeal No. ST-555/2011), M/s. Parimal Ghosh (Appeal No. ST-345/12), M/s. Swapan Dey (Appeal No.ST-362/2012), M/s. Sisir Ranjan (Appeal No. 342/12), M/s. Dipen Roy (Appeal No. ST-344/2012) submitted that the circular dated 30/7/2010 being beneficial to the appellants has to be applied to the present case. In support, he has referred to the decision of Honble Supreme Court in the case of Suchitra Components Ltd. Vs. CCE, Guntur-2007 (208) ELT 321 (SC). Further, he has submitted that the project/works carried out by the appellants are under the centrally sponsored scheme (CSS) and Centrally funded schemes and thus are being implemented directly by the Central Government through Central/State Govt. agencies, hence, not leviable to Service Tax. Further, he has submitted that the issue involved in the present case being classification of taxable services, being interpretational in nature not having any ingredient of suppression of facts with intent to evade payment of duty, hence barred by limitation.
20. The Ld. Advocate Ms. Swapna Das for M/s. ABCL Infrastructure Pvt. Ltd. (Appeal No. ST-505/11 and ST-357/2012) and M/s. Decon India Pvt. Ltd. (ST-39/2012 and ST-70636/2013 and M/s. Roy Mitra Enterprise (Appeal No. ST-707604/2013 and ST-365/2012 and ST-559/2011) has submitted that the act of Border Fencing and furthermore the construction of road, clearance of jungles and laying down drains is in view of the Act Border Fencing and as such activities are wholly and exclusively for the nation and can be classified under the ambit of rendering a sovereign function and is not for a commercial purpose so as to attract Service Tax. The Ld. Advocate referred to the judgment of the Tribunal in M/s. Nagarjuna Construction Vs. CCE -2010 (19) STR 59 wherein it is held that the Act of designing, building and operating the water together that the drain pipes is not for the sale but for the state and is incidental for the primary use of distribution of water Act does not attract Service Tax. Further, she has submitted that the act of Border Fencing does not wholly attribute to the act of erecting, fencing but also involves laying cables alongside the roads, clearance of jungles as well as the act of shifting the overhead cables and also the construction of roads as much as widening the road etc. The Ld. Advocate referred to the circular of the Board bearing No. 123/5/2010-TRU dated- 24th May, 2010 with aforesaid activities do not attracts Service Tax under Section 65 (105) (zzzd) of the Act. Further, she has referred to the judgment of National Building Construction Ltd. Vs. CCE of the Patna High Court dated 4th May, 2011. The contractor M/s. Avantika which has rendered site formation to M/s. NBCC pursuant to a contract of M/s. NTPC; NBCC was held liable to tax under the Finance Act and not M/s. Avantika contractor as the former was actually rendering services to M/s. NTPC although the agreement entered into between them on principal to principal basis. So advancing the alternative argument, the Ld. Advocate submitted that in the event the Border Fencing services is classified as taxable service under 165 (105) zzz of Finance Act then the executing agency i.e. M/s. EPIL be liable to Service Tax. The ld. Consultant Shri A.C. Tikadar for the appellant M/s. N.G. Bhattacharya and M/s. Ashutosh Bandyopadhyay (Appeal No.ST/391) reiterated the submissions advances by others and disputed the computation of the demands in these appeals.
21. The Ld. Advocate Shri Soumajit Mitra for the appellants M/s. LTR Construction (Appeal No. ST/509/11), M/s. LRM & Sons (Appeal No. ST/506/11) and M/s. LH Enterprise (Appeal No. ST/508/11) referring to the definition of assessee, prescribed under Finance Act, 1994 submitted that sub-section of Section 68 states that the service provider has to pay Service Tax but in terms of sub-section 2 of the said section; only those persons who are under any rules made under the Act are stated as person liable to pay service tax would only be liable to pay the service tax. Further, referring to Rule 2 sub-rule (d) of Service Tax Rules, 1994 prior to 01/7/2012, he has submitted that whatever service if at all that were provided by the appellants, yet they never become liable to pay service tax or in other words, the assessee under the Act would enable the Department to demand any money as service tax for the relevant periods from the appellants. Further, the Ld. Advocate submitted that the position has been changed w.e.f. 1/7/2012. Therefore, it is his submission that the appellants were not assesses under the said act. Accordingly, they are not liable to pay any service tax for the relevant period.
22. Per contra, ld. Special Counsel for the Revenue reiterated the findings of the ld. Commissioner and submitted that the contentions of the ld. Advocates for the Appellants are fallacious, as or in sub-section (39a) of Section 65 of the Finance Act, 1994, cannot be read as and. He also submits that on a careful reading of the aforesaid provisions namely, clause (39a) of Section 65 of the Finance Act, 1994, i.e. erection, Commissioning or Installation Services, it could be seen that the disjunctive word or has been invariably used before the word, Installation in each of the aforesaid provisions. Besides, in clause (39a)(i), or has been used a second time preceding the word, Structure. It is the case of the Revenue that the word, or in all these provisions, should be taken as a particle connecting words, phrases or classes as alternatives and disjunctive in the absence of any legislative intent to the contrary. In support, he refers to the judgment of the Honble Supreme Court in the case of Municipal Corporation of Delhi vs. Tek Chand Bhatia, AIR 1980 SC 360 and Fakir Mohd. (Dead) by LRs vs. Sita Ram, (2002) 1 SCC 741. It is his submission that in the present case, the Appellant had failed to establish that there had been a manifest intent of the legislature, as could be evident from any part of the same statute, so as to justify the interpretation of the disjunctive word, or as and. Therefore, he submits that the ld. Adjudicating Authority has correctly held that the words, Erection inserted w.e.f.10.09.2004, in the definition, Commissioning or Installation Services under sub-clause (zzd) of Section 65(105) of the Finance Act, 1994 read with sub-clause (39a) of Section 65 of the said Act, ought to be interpreted as an alternative and not cumulative, in view of the word, OR.
23. He contends that the Boards Circulars bearing Nos.80/10/204-ST dated 17.09.2004 and 123/5/2010-TRU dated 24.05.2010, referred to by the ld. Advocate, are in the nature of clarifications, hence should not be read as statutes. Similarly, the case laws referred to by the ld. Advocates for the Appellants, are not relevant to the present case. Distinguishing the Boards Circular dated 17.09.2004, the ld. Special Counsel submitted that in 2004, the word, structure, was not present in the definition of Erection, Commissioning or Installation Services; it has been inserted with effect from 01.05.2006 only, hence the said circular is not applicable. He has further submitted that irrespective of the fact that the services in some of the Appeals, might have commenced prior to 01.05.2006, but, Precisely, in three out of the four impugned Orders-in-Original dated 06.07.2011, 12,08.2011 and 08.05.2012, the period involved, was with effect from 01.05.2006, when the word, Structure got inserted in clause (39a) of Section 65 of the Finance Act, 1994. Only in few cases, the period in question fell partly prior to 01.05.2006 and the ld. Adjudicating Authority had excluded such period from computation of demands. Further, he has submitted that in absence of the word, Structure in the definition of Erection, Commissioning or Installation Services, erection could be considered as involving civil works for purposes of classification, involved in a composite contract, including Installation and Commissioning as well. Insertion of the word, Structure with effect from 01.05.2006, added a new dimension to the scheme of things, when Erection of Structure became a wholesome, self-contained service and could be considered independent of commissioning or installation.
24. Further interpreting the Boards Circular dated 17.09.204, the ld. Special Counsel has submitted that OR cannot be read as AND, if the Boards previous Circular No.62/11/2003-ST dated 21.08.2003 also be considered. He also submits that in the later Circular, installation of booster pump, air-conditioner, water filter, water heater etc. was covered by the definition, Commissioning or Installation Service, as all these are machinery, plant or equipment. Thus, composite service of commissioning and installation in a plant, was considered as not necessary, by the Board for classification of installation of those articles in a residential complex under sub-clause (zzd) of Section 65(105) of the Finance Act, 1994. He also submits that installation of electronic devices, plumbing etc. was not specifically inserted in Section 65(39a) of the said Act, till 16.06.2005. After insertion of the word, Erection 65(39a) of the Act ibid, with effect from 10.09.2004, and the word, Structure, from 01.05.2006, it would be only logical to construe that erection of structure would be covered by the definition of Erection, Commissioning or Installation in Section 65(39a) of the said Act, for purposes of classification of the said service under sub-clause (zzd) of Section 65(105) of the said Act. Further, distinguishing the Circular dated 24.05.2010, the ld. Special Counsel submitted that it is clarificatory in mentioning that if an activity does not result in emergence of an erected, installed and commissioned plant, machinery, equipment or structure, the same is outside the purview of the taxable service, which cannot be understood to mean that word, OR be read as AND in Section 65(39a) and in sub-clause (zzd) of Section 65(105) of the said Act. Further, he submits that in case, OR in clause 65(39a) of the Act ibid, is read as AND in both places, resulting into erection, commissioning and installation of plant, machinery and structure respectively, then any of the activities would not satisfy the definition of Erection, Commissioning or Installation, and all the activities are necessarily to be carried out to come within the scope of service tax under Erection, Commissioning or Installation Service. This interpretation for rendering levy of service tax under sub-clause (zzd) of Section 65 of the said Act, would be infructuous. On the other hand, if the second OR in Section 65(39a) of the said Act, is construed as disjunctive and the first OR is conjunctive, then also, it is to be established that each of the components namely, plant, machinery, equipment or structure, as the case may be, should be erected, commissioned and installed for the purpose of levy of service tax under sub-clause (zzd) of Section 65 of the Act ibid. For example, if equipment are installed and commissioned, but not erected, there would not be question of levy of service tax, as per the argument of the Appellants. This would result into much scope of evasion of the service tax and such levy would be non-est. He also submits that sub-clause (ii) of Section 65(39a) of the Finance Act, 1994, includes installation of electrical and electronic devices, plumbing, drain-laying, heating, air-conditioning etc. within the scope of Erection, Commissioning or Installation Services, thus specifying the activities within the scope of services with a disjunctive word, OR. It is also his submission that since a sub-clause cannot be contradictory to the principal clause, unless a specific exception is made in the sub-clause, sub-clause (ii) of Section 65(39a) of the said Act needs to be harmoniously constructed with sub-clause (i) thereof, which would result into reading OR as disjunctive and nor conjunctive.
25. Rebutting the argument of the ld. Advocates of the Appellants, in regard to application of ejusdem generis in the interpretation of Section 65(39a) of the said Act, it is argued by the ld. Special Counsel that structure be understood in the sense in which it is appearing with the words, machinery, equipment. He also submits that the said principle is not applicable to the present scenario, in view of the judgment of the Honble Supreme Court in the case of Grasim Industries Ltd., vide 002(141)ELT 593(SC). He also submits that in the present case, the preceding words do not constitute mere specifications of a genus, but constitute description of a complete genus. Further, he referred to the judgment of this Tribunal in the case of Shakumbari Sugar & Allied Industries Ltd., 2012(283)ELT 216(Tri.Del.). He also contends that erection of structure cannot be read ejusdem generis with commissioning or installation of plant, machinery or equipment, since to plead the terms, machinery, equipment or structure succeeding the term plant in Section 65(39a) of the said Act, should be read ejusdem generis with plant, would amount to rendering those terms, as redundant.
26. The ld. Special Counsel also contends that the contention of the ld. Advocates for the Appellants that the services provided by them under Centrally Sponsored Scheme (CSS) were not taxable, does not hold good, as after exchange of correspondences between the Ministry of Home Affairs and Ministry of Finance, it was communicated by the Revenue Secretary through its letter dated 08.07.2010, that the matter was under the process of adjudication, and the decision to levy service tax cannot be reviewed. Also in view of the Boards Circular No.354/59/2006-TRU dated 10.11.2006 to the effect that wherever the service-provider is mentioned as any person, it would include government also, and therefore, there is no doubt in levying service tax on the government agencies like NPCCL, EPIL etc., when render taxable services, unless specifically exempted by way of any notification. Further, he has submitted that on a careful reading of the MHA and NPCCL and EPIL, it can be deduced that the border-fencing works had been allotted to the two Executing Agencies. In that sense, NPCCL and EPIL executed the installation and commissioning of the border-fencing works, while sub-contractors erected the fence-structures. Hence, both the Executing Agencies and the sub-contractors were liable to service tax.
27. Further, he submits that carrying out the other works like jungle-clearance, road-construction, plumbing, erection of O.P.Tower, installation of flood light etc., even though had nothing to do with erection of fence, but would be covered under the scope of Erection, Commissioning or Installation Service, when the works like plumbing, installation of flood-light, drain-laying, were specifically included in the definition of Erection, Commissioning or Installation, whereas the other works, though not expressly covered in the said clause, such as jungle-clearance, road-laying etc., but those composite services would be classified as the services under Section 65A(2)(b) of the Finance Act, 1994. Further, he submits that the contention of the Executing Agencies that they had only discharged only advisory roles and that too, prior to commencement of the Project and after completion of the Project, is not correct, in view of Clause 10 of the Special Conditions of the Contract entered into. Further, he submits that the definition of Commissioning and Installation Agency is clearly applicable to NPCCL and EPIL, as laid down in clause 29 of Section 65 of the said Act. Further, he has submitted that levy of service tax by the Executing Agencies would not absolve the liability of service tax fastened on the sub-contractors, has been settled in view of the decision in the case of Sunil High-Tech Engineers Ltd., vide 2014-TIOL-541-CESTATE-MUM. Further, he argued that the demands are correctly confirmed invoking the larger period of limitation. In this context, he has referred to the decision of this Tribunal in the case of Anand Transformers (P) Ltd., 2014(33) STR 314(Tri.Del.), in submitting that the Appellants had neither registered themselves with the Department, even though they were well aware of the fact that service tax was required to be discharged on the activities carried out by them, therefore, the ld. Commissioner has rightly confirmed the demands, invoking the larger period of limitation.
28. Heard Advocates for the Appellants and the Spl. Counsel, Shri A.K.Raha for Revenue at length. From the factual matrix narrated, we find that the Ministry of Home Affairs by entering into Memorandum of Understandings (MOUs in short) with M/s. National Projects Construction Corporation Ltd. (M/s. NPCC in short), M/s. Engineering Projects (India) Ltd. M/s. EPIL in short), the execution Agencies, entrusted the work of construction of Border Out Posts (BOPs in short) along the Indo-Bangladesh Border. A sample MoU is reproduced below:
MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (MOD) is entered on the 14th day of December 2004.
BETWEEN MINISTRY OF HOME AFFAIRS BORDER MANAGEMENT DIVISION NORTH BLOCK NEW DELHI-110011 (Hereinafter referred 10 as 'MHA' which expression shall unless repugnant to the context or meaning thereof be deemed to mean and include its successor and permitted assignees.) ENGINEERING PROJECTS (INDIA) LTD.
CORE 3, SCOPE COMPLEX, 7, INSTITUTIONAL AREA, LODHI ROAD, NEW DELHI (Hereinafter referred to as 'EPI' which expression shall unless repugnant to the context or meaning thereof be deemed to mean and include its successor and permitted assignees) WITNESSETH WHEREAS MHA is intending to award the work of Construction of Border Road and Fencing for certain stretches of Mizoram sector along Indo-Bangladesh Border (IBB) to EPI(hereinafter referred to as "Project").
Whereas EPI, a Government of India Enterprise, under Ministry of Heavy Industries & P ublic Enterprises has all the resources and capabilities in taking up construction works of IBB Border Road and Fencing as per the requirements of MHA and has agreed to take up the project.
NOW THEREFORE, it has been agreed between the parties as under
1. As per decision taken vide letter no.11013/30/2003-BM III Desk dated 2nd November, 2004, EPI shall be Execution Agency for the construction of IBB Fencing and Border Road in Mizoram for following Stretch:
STRETCH LENGTH TENTATIVE
PROJECT COST
FROM MARPARA (BP 2319)
TO
DEMAGIRI (BP 2338) 46.00 Km. 105.00 Crore (approx.)
2. The services to be provided by EPI shall be as under:
i) Carrying out detailed survey of the Sec. or of the Project allocated to it.
ii) Finalisation of alignment in consultation with BSF and DM of the area.
iii) Deciding upon the type of fencing required for the sector as per site conditions in consultation with BSF
iv) Preparation of comprehensive estimate for the works required for Sector
v) Submission of the estimate to MHA
vi) Getting the works executed as Execution Agency
vii) Handing over of the completed WORKS to BSF or nominated agency of MHA
viii) Rectifications of defects during defect liability period
3. EPI shall carry out survey of the sector for the project allocated to it and shall prepare a comprehensive estimate for the project after identifying the type of fencing required as per site conditions and as finalized with BSF. This estimate shall be prepared on the basis of CPWD norms wherever applicable and on the basis of market rate analysis where CPWD rates etc. are not applicable. This estimate should be comprehensive and should include for but not limited to the following":
i) Survey and field investigations
ii) Jungle clearance & cutting of trees
iii) Fencing (As per type required) with access gates
iv) Retaining Wall, earth filling, earth cutting
v) IBB Roads as per type required
vi) Link roads/access roads to BOP and from PWD roads
vii) Pipe Culverts
viii) Patrolling track along the fencing
ix) Cost of land acquisition
x) Cost of Security cover
xi) Other enabling works
xii) Provision of contingencies, local charges, agency charges etc
xiii) All as required for assessing the completion cost of the works
4. The estimate shall be submitted to the Border fencing and roads cell under ADG (Border), CPWD for vetting. The approved cost for this work shall be as per estimates scrutinized by the Technical Committee and approved by the High Level Empowered Committee. The approved cost should not exceed during execution provided there is no change in specification, scope of work or site condition during execution of works from the provisions envisaged at the time of preparation of estimates.
5. EPI shall take up this work on "Deposit Basis' as per provisions of CPWD manual. EPI shall be paid agency charges at 10% of the actual cost of the work. The actual cost of the work incurred plus EPl's agency charges on the same shall only be charged to the project and saving on the estimated COST shall be to MHA's account.
6. On the basis of approved project cost, MHA shall release to EPI 25% of the approved cost as initial deposit. EPI shall incur expenditure from this deposit for the execution of work and EPI shall submit monthly expenditure statement in the accounting proforma of CPWD. The initial deposit shall be recouped by MHA upon submission of expenditure statement by EPI and MHA shall ensure that sufficient funds are available with EPI at all times for carrying out the works unhindered.
7. EPI shall be responsible for liaisoning with the State Government / local authorities for acquisition of land and getting forest /environmental clearance for carrying out the Fencing and Road and related work. EPI shall also finalize the alignment of the fencing in joint consultation with BSF & DM of the area where the Fencing and Road is proposed. EPI shall hand over the Fencing, IBB Roads, and allied works after their completion to the designated agency nominated by MHA.
8. EPI shall adhere to the time frame for submission of estimate and execution of works as given under.
a) FOR SUBMISSION OF ESTIMATES The Fencing and IBB/Road work of entire stretch of 46.00 Km shall be divided into two segments approximately of 23.00 Km. each. The detail estimate of entire stretch of 46.00 Km shall be submitted to BFR Cell of CPWD in phased manner from February 2005 to February 2006.
b) FOR EXECUTION OF WORKS The work of Fencing and Border Road shall be taken up in phases as per enclosed schedule and the entire work of 46.00 Km shall be completed by March 2007.
9. EPI shall be liable to the liquidated damages in case the work is delayed by the EPI beyond the agreed time schedule due to the reasons solely attributable to EPI. The liquidated damages shall be 2% (Two percent only) of the balance value of work for each month of delay beyond stipulated time of completion subject to a maximum of 10% (ten percent of the balance value of work.
10. EPI will submit to MHA monthly report indicating physical progress, financial progress etc. for each project. While executing this project, EPI will strictly implement the quality control and quality assurance functions as per EPI's Quality Plan and as per CPWD norms.
11. EPI shall be responsible for rectification of defects during defect liability period of 12 months after completion of the works.
EPI shall appoint a Nodal Officer at Delhi who shall co-ordinate the various activities of Co-ordination and Monitoring of the projects.
While further details and estimates are being processed. EPI shall start the pre-construction activities on the basis of this MOU.
Signed at New Delhi on this day as mentioned above.
For and on behalf of For_and on behalf of
Sd/- Sd/-
(P.K.PATHAK) (A.S.KHARB))
Ministry of Home Affairs Addl. General Manager
New Delhi Engineering Projects (India) Ltd.
For MINISTRY OF HOME AFFAIRS (A Govt. of India Enterprise)
Core-3, Scope Complex
Lodhi Road, New Delhi-110033
FOR ENGINEERING PROJECTS (I) LTD.
29. Consequent to the said MOU, the Executive Agencies namely, M/s. NPCC, M/s. EPIL floated tenders for execution of the aforesaid work of construction of BOPs, and the successful bidders were appointed as the contractors. The contactors were allotted different work as per the tenders. In one of the sample work Order, issued to Sibu Saha, broadly, the scope of work mentioned therein reads as below:
ENGINEERING PROJECTS (INDIA) LTD.
(A MINI RATNA-GOVT. OF INDIA ENTERPRISE) ISO 9001 : 2000 & ISO 14001 : 2004 CERTIFIED NRO/CON/496/480A Dated:20.03.09 M/s Shibu Saha:
"Milan Kuthir"
Shibnagar. Gedu Miya Maszid Road, P.O Agartala Coll ege, West Tripura- 799004 Sub: - Construction of Fencing cum Road work along Indo-Bangladesh, between BP 2324 and BP 2322 in Mizcram under Package-XI Ref:- (i) NIT No NRO/CON/496/480A dated 28.01.09
(ii) M/s Shibu Saha's Offer No. Nil dated 12.02.09 Dear Sir, With reference to the above, Engineering Projects (India) Ltd. is pleased to issue this Letter Of Intent (LOI) on behalf of Ministry of Home Affairs, North Block, New Delhi. Construction of Fencing cum Road work along Indo-Bangladesh, between BP 2324 and BP 2322 in Mizoram under Package-X on you at total vaiue of Rs. 16,08,42,994.00 (Rupees sixteen crores: eight lakhs, forty two thousand nine hundred ninety four only) (Contract Value) at 13.5% i thirteen point five percent) above the estimated cost of Rs.14,17,11,889.00, as per enclosed BOQ and SOR at Annexure-l.
Scope of work and other terms and conditions governing the LOI shall inter-alia include the following
1. SCOPE OF WORK 1.1 The scope of work shall be complete construction of road cum fencing along Indo-Bangladesh Border between Border pillar BP 2324 (KP-75,Chainage 68840M) and BP 2322 (BM-B1, Chainage 77140M) (approximate length 8.3 KM) using copper enriched Mild Steel angle, M.S.flats, barbed wire, concertina coil. cement concrete, earthwork, stone aggregate, bitumen, pipe culverts, retaining walls using hard stone, steel gates etc. as per design, drawing and description of item mentioned in enclosed Bill of quantities.
1.2 Stone quarry of sufficient capacity as required shall also be arranged by the Contractor. Developing stone quarry for Quarrying the stone of desired quality and quantity shall be in the scope of the Contractor. The cost of this shall be deemed to be included in his quoted rates ard nothing extra shall be payable to the Contractor on this account.
.
30. In the present batch of Appeals, thus, there are two categories, namely (i) the Executive Agencies; and (ii) the contractors who had carried out the work, consequent upon the agreement between them and the Executive Agencies for undertaking the respective works relating to the construction of BOPs which include Fencing of the Boarder. It is relevant at this stage, to mention that the service receiver in this case, is Ministry of Home Affairs(MHA) who had appointed M/s. NPCC and M/s. EPIL for execution of the Project of Construction of BOPs. The said executing Agencies and the Contractors/sub-contractors in turn, appointed by the Executive Agencies, for carrying out various works are the service providers.
31. Ld. Advocates for the Appellants assailed the impugned Orders on merit broadly on two counts. It is argued that the activities of boarder fencing carried out by the contractors as well as by the Executive Agencies, were not in the nature of Erection, Commissioning or Installation of plant, machinery, equipment or structures whether pre-fabricated or otherwise. It has been their contention that fencing could loosely be called as a structure, but the services rendered by them are not in the nature of Erection, Commissioning or Installation, but in the nature of civil construction. In support of the said contention, the Appellants have mainly relied on the Circulars issued by the Board from time to time. Secondly, it is also argued that the structure is not defined under the Finance act, 1994, hence from the literal/dictionary meaning of structure, Erection, Commissioning or Installation Services, and applying the principles of ejusdem generis, the word erection & structure should be read in the context and the company of words in which it appear. It is their submission reading that in the context of words Plant, machinery and equipment, the expression structure-pre-fabricated or otherwise cannot be interpreted to include boarder fencing structure.
32. The core issue needs to be addressed, is whether the activity/service of Border Fencing, across Indo Bangladesh Boarder, is a service fall under the definition of Erection, Commissioning or Installation as prescribed at Section (39a) of Sec.65 of the Finance Act, 1994 or otherwise. The ld. Commissioner taking recourse to the definition of fence, as mentioned under various dictionaries, observed that fence unambiguously refers to structure and accordingly concluded that since fence is a structure, the service of erection of fence satisfies the definition of Erection, Commissioning or Installation Service. It is his reasoning that the activity of erection, commissioning or installation is not to be read cumulatively, but to be read alternatively.
33. Before analyzing the arguments advanced by both sides, it is necessary to have a glimpse at the meaning and changes made to the definition of erection, commissioning or installation service and the taxable service of commissioning or Installation agency.
34. Service tax levy on Commissioning or Installation Service was introduced with effect from 14.05.2003, and thereafter changes brought to it from time to time as below:
(A) with effect from 14-5-2003:
Section 65. Definitions - In this Chapter, unless the context otherwise requires, - (28)? commissioning or installation means any service provided by a commissioning or installation agency in relation to commissioning or installation of plant, machinery or equipment (29)? commissioning and installation agency means any agency providing service in relation to commissioning installation (105)?taxable service means any service provided -
(zzd) to a customer, by a commissioning and installation agency in relation to commissioning or installation :
(B) with effect from 10-9-2004:
Section 65. Definitions - In this Chapter, unless the context otherwise requires, - (39a) erection, commissioning or installation means any service provided by a commissioning and installation agency in relation to erection, commissioning or installation of plant, machinery or equipment (29)?commissioning and installation agency means any agency providing service in relation to erection, commissioning or installation (105)?taxable service means any service provided or to be provided -
(zzd) to a customer; by a commissioning and installation agency in relation to erection, commissioning or installation;
( C) with effect from 16-6-2005:
Section 65. Definitions - In this Chapter, unless the context otherwise requires,-
(39a) erection, commissioning or installation means any service provided by a Commissioning or Installation agency, in relation to
(i) Erection, Commissioning or Installation of plant, machinery or equipment; or
(ii) Installation of -
(a) Electrical and electronic devices, including wiring or fittings therefore; or
(b) Plumbing, drain laying or other installations for transport of fluids; or
(c) Heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work; or
(d) Thermal insulation, sound insulation, fire proofing or water proofing; or
(e) Lift and escalator, fire escape staircases or travelators; or
(f) Such other similar services (29)?Commissioning and Installation agency - means any agency providing service in relation to Erection, Commissioning or installation (105)?taxable service means any service provided or to be provided -
(zzd) to a customer, by a Commissioning and Installation agency in relation to Erection, Commissioning or Installation;
(D) With Effect from 01.05.2006:
Section 65. Definitions - In this Chapter, unless the context otherwise requires,- (39a) erection, commissioning or installation means any service provided by a Commissioning or Installation agency, in relation to
(i) Erection, Commissioning or Installation of plant, machinery or equipment; or structures, whether pre-fabricated or otherwise; or
(ii) Installation of -
(a) Electrical and electronic devices, including wiring or fittings therefore; or
(b) Plumbing, drain laying or other installations for transport of fluids; or
(c) Heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work; or
(d) Thermal insulation, sound insulation, fire proofing or water proofing; or
(e) Lift and escalator, fire escape staircases or travelators; or
(f) Such other similar services (29)?Commissioning and Installation agency - means any agency providing service in relation to Erection, Commissioning or installation (105)?taxable service means any service provided or to be provided -
(zzd) to a customer, by a Commissioning and Installation agency in relation to Erection, Commissioning or Installation;
35. A cumulative reading of the aforesaid provisions, we find that initially, service tax was levied on the activity of commissioning or installation in relation to plant, machinery or equipment. Later the word erection was added to the same and the activity of Erection, Commissioning or Installation in relation to plant, machinery and equipment, was subjected to service tax, when rendered by a commission or installation agency. Commissioning or installation agency is defined at clause (29) of Sec.65 to mean any agency providing services in relation to Erection, Commissioning or Installation. The expression, structure-pre fabricated or otherwise added subsequently.
36. The ld. Special Counsel for the Revenue has vehemently argued that after insertion of the expression, structure whether pre-fabricated or otherwise, the scope and scheme of levy of service tax under the category of Erection, Commissioning or Installation Service, has undergone a total change. In other words, his argument is that, even though the word structure is also mentioned in the definition of Commercial or Industrial construction service, but when erected, would fall under the scope of Erection, Commissioning or Installation Service after 01.05.2006, the effective date from which the expression structure-pre-fabricated or otherwise has been inserted. This argument, in our opinion, at the first blush though sounds attractive, but is devoid of merit when read with the object behind insertion of the word erection to the definition of Commissioning or Installation.
37. The word, erection has been inserted into the existing meaning of Commissioning or Installation Service with effect from 10.09.2004 and a new service viz. Commercial or Industrial Construction Services, was also introduced from the said date. Needless to mention, the Circular issued after introduction of the said service of Commercial or Industrial Construction Service, and on expansion of the existing service of Commission or Installation, by inserting the word erection would be useful in understanding the width and amplitude of the word erection. The Honble supreme Court in the case of Commissioner of Trade Tax,U.P Vs.Kajaria ceramics Ltd. 2005(191) ELT 20(SC) emphasizing the relevance of the Department circulars observed as:
28.The Circular can be read as a contemporaneous understanding and exposition of the intention and purport of the Notification. Courts have treated contemporary official statements as contemporary exposition and used them as aids to interpret even recent statutes.
38. It has been clarified by the Board in the Circular No.80/10/2004-ST dt. 17.09.2004 at para:14 as:
14.?Extension of service tax on installation and commissioning, to erection services :
Service tax was levied on commissioning and installation of plant, machinery and equipment w.e.f. 1-7-2003. The general practice is that erection, commissioning and installation are contracted as a composite package. There have been a number of doubts and queries regarding the distinction between erection and commissioning/installation. Erection would refer to the civil works to installation/commissioning of a plant or machinery. In this years budget, the scope of service tax under installation and commissioning is being extended to include erection also. Erection involves civil works, which would otherwise fall under the category of construction services. However, in case of a composite contract for erection, commissioning and installation, the erection charges would be taxed as part of this category of service(emphasis supplied).
39. In the aforesaid Circular, it is made amply clear that even though erection is a civil work, but in a composite contract for Erection, Commissioning or Installation Service, an erection charge would be taxed as part of the commissioning or installation Service. Thus, the legislators are fully aware of the situation that the activity of erection, though fall under the category of Construction Service, but in a composite contract, the charge collected on this account would also be taxed under the category of Erection, Commissioning or Installation Service. To add further, it could safely be inferred that it was not the intention of the legislature to tax the activity/service of erection separately in relation to the objects of levy viz. plant, machinery or equipment, but it is a necessity to be taxed being carried out along with commissioning or installation service, and when the charges thereof are composite. Therefore, it would be incorrect to interpret that after addition of the expression, structure-pre-fabricated or otherwise to the existing list of objects of levy of plant, machinery or equipment, it brought significant change in the said entry so as to result an interpretation that activity of erection of structure standing alone, would be leviable to service tax. On the contrary, the purpose for which the word erection was inserted continued to be the same as was applicable to plant, machinery or equipment even after addition of the expression structure-pre-fabricated or otherwise.
40. This intention is further manifested In the subsequent Circular bearing No.123/5/2010-TRU dt.24.05.2010 at para2(ii) as:
(ii)?Under Erection, commissioning or installation services, the activities relevant to the instant issue are (a) the erection, commissioning and installation of plant, machinery, equipment or structures; and (b) the installation of electrical and electronic devices, including wiring or fitting there for. Thus, if an activity does not result in emergence of an erected, installed and commissioned plant, machinery, equipment or structure or does not result in installation of an electrical or electronic device (i.e. a machine or equipment that uses electricity to perform some other function) the same is outside the purview of this taxable service.(emphasis supplied)
41. In the above Circular it is clarified that erection, commission or Installation service comprise of two parts: In the first part the activities relate to erection, commissioning and installation of plant, machinery, equipment or structures, whereas, in the second part, it is only installation of electronic or electronic devices. It is further stated that if an activity results into emergence of an erected, installed and commissioned plant, machinery, equipment or structure, then only it is taxable under the said category. This clearly indicates that the activity of erection cannot stand alone, but to be present in a composite contract involving commissioning or installation service also in relation to plant, machinery, equipment or structures whether pre-fabricated or otherwise.
42. The ld. Special Counsel for the Revenue argued that the aforesaid Circulars issued by Board should not be read as statutes and are merely clarificatory in nature. We do not see force in the said arguments, in view of the series of judgments of the Honble Supreme Court. In the case of Collector of C.Ex. Vs. Dhiren Chemicals 2002(139) ELT 3(SC) Honble Supreme Court observed as:
9.?We need to made it clear that, regardless of the interpretation that we have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue.
43. In Paper Products Ltd. Vs. Commissioner of Central Excise, 1999 (112) ELT 765(SC) Their Lordships observed as:
5.?It is clear from the above said pronouncements of this Court that, apart from the fact that the Circulars issued by the Board are binding on the Department, the Department is precluded from challenging the correctness of the said Circulars even on the ground of the same being inconsistent with the statutory provision. The ratio of the judgment of this Court further precludes the right of the Department to file an appeal against the correctness of the binding nature of the Circulars. Therefore, it is clear that so far as the Department is concerned, whatever action it has to take, the same will have to be consistent with the Circular which is in force at the relevant point of time.
44. Hence, the circulars issued by the Board explaining/clarifying the meaning of Erection, Commissioning or Installation Service, cannot be ignored, while interpreting the same and applying it to the facts and circumstances of the present case.
45. The other plea of the Appellants that OR used in the meaning/definition of Erection, Commissioning or Installation, should be read as AND. We do not find any reason to read OR as AND in the said definition. While introducing the levy w.e.f.14.05.2003, initially it was the service of Commissioning or Installation, that were held to be taxable, but later the word, Erection, has been added to it. While adding the word, Erection, it was not mentioned as Erection or Commissioning or Installation, but Erection, Commissioning or Installation. Besides, the later part of the said entry of clause (39b), specific activities were included in the scope of Installation, w.e.f 16.06.2005, which otherwise would not involve the activity of Erection, Commissioning or installation. Therefore, the intention of the legislature was that either Commissioning or Installation along with Erection in sub clause(i) or Installation of the activities mentioned in the subsequent part, sub-clause(ii) of the said clause(39a) of Sec.65, would be taxable under the category of Erection, Commissioning or Installation Service.
46. Now coming to the second limb of argument advanced by the Appellants that the expression structure-pre fabricated or otherwise if interpreted in the context, the same would not be applicable to boarder fencing, even if the later could loosely be described as structure. In support of their contention they had referred to the dictionary meanings of erection, installation & structure which are tabulated as below:
The Lexicographic meaning of "erection", "installation" and structure are as follows:-
Dictionary Erection Install/Installation structure Collins-Cobuild English Dictionary Erect -- If people erect something such as a building, bridge, or barrier, they build it or create it. Erection 2. The erection of something is the act of building it or placing it in an upright position ....... erection of temporary fencing to protect hedges under repair.
Installation if you install a piece of equipment, you fit it or put it somewhere so that it is ready to be used. They had installed a new phone line in the apartment.
Webster's New Dictionary & Thesaurus Erect - a. upright. V.t. set up; build, erectile a. -erection n. erect'or n. [L. erectus, upright] A thing constructed, a complex entity constructed of many parts.
McGraw-Hill Dictionary of Scientific and Technical Terms Installation Procedures for setting up equipment for use or service.
Black's Law Dictionary Erect - 1. To construct. 2. To establish.
A framework or construction with elements Identifiable, giving stability, form & able to resist strain & stress; that which is built or constructed, an edifice or building of any kind.
Oxford Dictionalry n. manner in which a building or organism or other complete whose is constructed, supporting from work or whole of the essential part of something, make, construction Chambers Dictionary n. manner of building; construction; a building in a substance; manner of organization; an organic form. Strouds Judicial Dictionary
1. In its ordinary sense, means something which is constructed in the way of being built up as is a cuilding (SouthWales Alluminium Co. V. Neath Assessment Committee)
2. An advertising sign of a sheet metal nailed to the outside of a frame which is put on a wall does not constitute a wooden or other structure or erection, within s. 18(1) at the Manchaster Corporation Act, 1891 (54 & 55 Vict., C.CCVII) (Borough Billposting Co. V Manchester Corporation, [1948] 1 All AIR 807)]
47. A simple reading of the afore said definitions do not help much in throwing light, whether the border fencing- structure would come under the scope structure-pre-fabricated or otherwise as mentioned under the definition of Erection, Commissioning or Installation. Thus, it is necessary to understand the scope of these words, in the context in which it appears. Emphasizing the said tool of interpretation, the Honble Supreme Court in the case of Reserve Bank of India vs. Peerless General Finance & Investment Co. Ltd., AIR:1987(SC):1023, has observed as:-
"33. Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With theses glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and every thing is in its place. It is by looking at the definition as a whole in the setting of the entire Act and by reference to what preceded the enactment and the reasons for it that the Court construed the expression "'Prize Chit" in Srinivasa and we find no reason to depart from the Court's construction."
48. The word structure appears under clause (25b) to Sec.65 which defines Commercial or Industrial Construction Services. There, it is referred as civil structure, but under the definition of erection, commissioning or installation services, it mentions structurepre-fabricated or otherwise. Thus, reading in the context, the structure pre-fabricated or otherwise would refer to both civil as well as mechanical structures. It cannot be denied that Commissioning or Installation Service was earlier in relation to plant, machinery, equipment etc., and to avoid confusion, in a composite contract involving civil work, the word, erection, has been added and to bring more clarity, the word, structure pre-fabricated or otherwise, has been added subsequently. If it is read in the context of plant, machinery, equipment, the expression Structure pre-fabricated or otherwise, in most of the cases, would refer to mechanical structure whether fabricated at site, or brought in pre-fabricated condition for erection, commissioning or installation, but it would also include civil structures necessary for erection, commissioning or Installation of plant, machinery, or equipment. Thus, fence, even though a structure, cannot be read in isolation but has to be read along with erection, commissioning or installation and also with the objects of service tax levy i.e. Plant, machinery or equipment.
49. The Ld. CA appearing for the Appellant M/s R.K.Grover & Co. (Appeal No. ST/A/70961/2013-DB during the course of hearing submitted that the demand of service tax on the activity of Border Fencing in the Indo Bangladesh Border has only been issued and confirmed and no such demands were issued for carrying the same activity in Indo-Pak Border for the same period. In support, he has r filed on 15.12.2014 a communication/ letter dt.03.12.2014 issued by M/s NBCC in response to an RTI application filed. The relevant portion reads as follows:-
Reference your afore-mentioned RTI application wherein you have desired to have certain information whether any Service Tax was ever charged/paid by NBCC, it is to intimate that Service Tax has not been charged either directly or through contractors bills or paid by NBCC for Indo-Pak International Border Fencing Works for the Financial Years, 2006-2007 to 2009-2010.
50. Since, in our opinion the activity/service of erection of border fencing-structure standing alone would not be subjected to service tax under clause (39a) of Sec.65, but ought to be along with the activity of commissioning or installation, in a composite contract, and no such finding is recorded in the impugned order that other activities of commissioning or installations are involved in the present Appeals, therefore, the other alternative arguments including the issue of limitation, raised by the Appellants become academic, hence, not delved into.
51. In view of above discussion, the impugned Orders are set aside and the respective Appeals filed by the Appellants are hereby allowed.
(Pronounced on 13.02.2015)
Sd/-13.02.15 Sd/-13.02.15
(I.P.LAL) (D.M.MISRA)
TECHNICAL MEMBER JUDICIAL MEMBER
DUTTA/
45
APPEAL NO.ST/A/366/12 AND OTHERS
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