Custom, Excise & Service Tax Tribunal
U E M India Ltd vs Delhi Ii on 12 August, 2021
Author: Dilip Gupta
Bench: Dilip Gupta
1
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
SERVICE TAX APPEAL NO. 50293 OF 2016
(Arising out of Order-in-Original No. DL SV TAX002COM0011516dated 27.10.2015
passed by Commissioner of Service Tax, Delhi-II)
M/s. UEM India Limited ...Appellant
Versus
Commissioner, Service Tax ...Respondent
Commissionerate, Delhi-II
APPEARANCE:
Shri B. L. Narasimhan, Advocate for the Appellant
Shri R. K. Majhi, Authorized Representative for the Respondent
CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P V SUBBA RAO, MEMBER (TECHNICAL)
Date of Hearing: July 12, 2021
Date of Decision: August 12, 2021
FINAL ORDER No. 51732/2021
JUSTICE DILIP GUPTA:
The order dated 27.10.2015 passed by the
1
Commissioner of Service Tax, Delhi-II confirming the
demand of service tax of Rs. 2,34,79,557/- under the proviso
to section 73(1) of the Finance Act, 1994 2 with interest and
penalty has been assailed in this appeal filed by M/s. UEM
India Limited3.
1. the Commissioner
2. the Finance Act
3. the appellant
2
2. The appellant is engaged in the construction of Sewage
Treatment Plant4, Effluent Treatment Plant5 and laying down of
Sewage pipelines for various customers, including several
government bodies.
3. In the year 2009, an investigation was initiated with
respect to the activities undertaken by the appellant on which
service tax was not discharged. These activities related to
construction of STP, ETP and sewage systems, in respect of
which a demand of service tax was made by alleging that
the construction undertaken was commercial in nature
and would qualify as a taxable service under the category of
'commercial or industrial construction service6, defined under
section 65(25b) of the Finance Act and made taxable under
section 65(105)(zzq) of the Finance Act. Accordingly, three
show cause notices were issued to the appellant for the
period prior to 30.06.2012. The demands proposed in these
notices were dropped by the Tribunal by an order dated
17.01.2019.
4. The present show cause notice dated 22.05.2014 has
been issued for the subsequent period July 2012 to March
2013 in continuation of the previous show cause notices
and proposes a demand of service tax of Rs.
17,92,08,222/- on the services, which include construction
of STPs, ETPs, and laying of sewage pipes, rendered to
Government bodies and other entities.
4. STP
5. ETP
6. CICS
3
5. The appellant filed a detailed reply contesting the
demand on the ground that the services rendered by it
were exempt by virtue of a Notification dated 20.06.2012
that was issued in exercise of the powers conferred by
section 93(1) of the Finance Act.
6. The demand of service tax, where the services were
rendered to Governmental authorities, has been dropped
by the Commissioner on the basis of the exemption
available under Serial No. 12 of the aforesaid Notification
dated 20.06.2012. However, demands in respect of three
entities were confirmed and the benefit claimed by the
appellant under Serial No. 13(d) of the said Notification
was denied. The relevant portion of this Notification dated
20.06.2012 is reproduced below:
"Notification No. 25/2012-ST, Dated 20-6-2012
In exercise of the powers conferred by sub-section (1) of
section 93 of the Finance Act, 1994 (32 of the 1994)
(hereinafter referred to as the said Act) and in
supersession of notification number 12/2012-Service Tax,
dated the 17th March, 2012, published in the Gazette of
India, Extraordinary, Part II, Section 3, Sub-section (i)
vide number G.S.R. 210(E), dated the 17 th March, 2012,
the Central Government, being satisfied that it is
necessary in the public interest so to do, hereby
exempts the following taxable services from the
whole of the service tax leviable thereon under
section 66B of the said Act, namely:-
1 to 12 xxxxxxx
13. Service provided by way of construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of,-
(a) xxxxxxx
(b) xxxxxxx
(c) xxxxxxx
(d) a pollution control or effluent treatment plant, except
located as a part of a factory; or a structure meant for
funeral, burial or cremation of deceased;"
(emphasis supplied)
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7. In terms of the Notification dated 20.06.2012, the
services provided by way of construction of a pollution
control or effluent treatment plant, except located as a
part of a factory, has been exempted from the whole of
the service tax leviable thereon under section 66B of the
Finance Act.
8. The three services, in respect of which the demands
have been confirmed, are tabulated below:
Sl. Service Recipient Activity undertaken by the Service Tax (in
No. Appellant Rs.)
1. ONGC Assam Construction of ETPs in the oil 26,49,982
fields of ONGC, registered
2. ONGC Ahmedabad under the Mines Act, 1952 2,06,54,736
National Building
3. Construction of Sewage 1,74,839
Construction Company
Treatment Plant
9. The findings, in regard to services at Serial No's. 1
and 2, namely construction of ETPs in the oil fields of
ONGC, have been recorded by the Commissioner in
paragraphs 74 to 77 of the order. The benefit of the
Notification dated 20.06.2012 under Serial No. 13(d) has
been denied for the reason that the services have been
rendered in the factory area. The findings are reproduced
below:
"74. I find that the noticee is not entitled for the
exemption Notification as claimed of the following
projects, the detail analysis report of the project
wise is mentioned hereunder:-
(a) Oil & Natural Gas Corporation Ltd., Ahmedabad:-
As per the contract agreement the service recipient is Oil & Natural
Gas Corporation Ltd., Ahmedabad and UEM is the service provider. As
per the agreement the nature of work is Survey (per-engineering,
preconstruction/ pre-installation and post installation), Design,
Detailed Engineering, Procurement & supply, Transportation,
Fabrication, Installation/erection Hook-up, Testing, Pre-commissioning,
5
Commissioning for Construction of Six Effluent Treatment Plant at
Ahmedabd and Anlkleshwar assets, India and 7 years of operation and
maintenance responsibility with details further described in part-IV of
Bidding Document.
(b) Oil & Natural Gas Corporation Ltd., Assam:- As per
the contract agreement the service recipient is Oil & Natural Gas
Corporation Ltd., Assam and UEM is the service provider. As per the
agreement the nature of work is Survey (per-engineering,
preconstruction/ pre-installation and post installation), Design,
Detailed Engineering, Procurement & supply, Transportation,
Fabrication, Installation/erection Hook-up, Testing, Pre-commissioning,
Commissioning for Construction of One Effluent Treatment Plant and
three Effluent Treatment Plant cum WIPs at Assam assets, India and 7
years of operation and maintenance responsibility with details further
described in part-IV of Bidding Document.
75. The noticee has claimed the exemption for Sl. No. 13(d)
of exemption Notification No. 25/2012-S.T. dated 20-06-2012
in the above mentioned both projects. Serial No. 13(d) of the
exemption Notification is reproduced below:
"Services provided by way of construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of a pollution control or
effluent treatment plant, except located as a part of a factory;
or a structure meant for funeral, burial or cremation of
deceased"
76. On going through the nature of job defined in the
contract with the ONGC i.e. Surveys (per-engineering, pre-
construction/ pre-installation and post-installation), Design, Detailed
Engineering procurement & supply, Transportation, Fabrication,
Installation/ erection Hook-up, Testing, Pre-commissioning,
Commissioning for Construction are not covered in Sl. No. 13(d) of
the exemption Notification mentioned above. It is hold that the
benefit of exemption is not allowed if the service has been
provided in the factory area. I find that definition of factory has not
been defined in the notification No. 25/2012-S.T. dated 20-06-2012,
however that the definition of factory has been defined under Section
2(e) of the Central Excise Act, 1944 as follows:-
"factory means any premises, including the precincts thereof,
wherein or in any part of which excisable goods other than salt
are manufactured, or wherein or in any part of which any
manufacturing process connected with the production of these
goods is being carried on or is ordinarily carried on".
77. The noticee submitted the letter dated 10.09.2012 issued by
ONGC that the operation in the oil failed falls under the Mines Act,
1952 and does not falls under Factory Act, 1948. I find that the
extraction of crude oil is also a part of the manufacturing
activities and therefore as per definition of the Factory it falls
within a factory premises. The benefit of the exemption Notification
cannot be available to the noticee on the ground that the operation in
the oil filed comes under the Mines Act, 1952. For Service Tax Rules/
The Finance Act, 1994, the Factory Act, 1948 is not relevant."
(emphasis supplied)
10. The findings in regard to the service at Serial No. 3,
namely construction of STPs for NBCC are contained in
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paragraphs 78 to 80 of the order passed by the
Commissioner. The benefit of the Notification at Serial No.
13(d) has been denied for the reason that the contract was
for sewerage treatment plant, which is not for pollution
control. The findings are reproduced below:
"78. National Building Construction Company Ltd. (NBCC):- As
per the contract agreement the service recipient is National Building
Construction Company Ltd. (NBCC) and UEM is the service provider.
As per the agreement the nature of work is Design, construction,
Erection, commissioning, Trial run including one year operation and
maintenance works of Sewerage treatment plant on turnkey basis
based on SBR Technology with PLC, SCADA system in Roorkee campus
of IIT Roorkee (3.2 MLD) and DPT Saharanpur campus of IIT Roorkee
(0.5 MLD).
79. The noticee has claimed the exemption for Sl. No. 13(d)
of exemption Notification No. 25/2012-S.T. dated 20.06.2012
in the above mentioned both projects. Serial No. 13(d) of the
exemption Notification is reproduced below:
"Services provided by way of construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of a pollution control or
effluent treatment plant, except located as a part of a factory;
or a structure meant for funeral, burial or cremation of
deceased"
80. On going through the documents submitted by the, I observe
that they were awarded to Design, construction, erection,
commissioning, trial run including one year operation & maintenance
works of sewerage treatment plant on turnkey basis on SBR
technology with PLC, SCADA system in Roorkee Campus of IIT
Roorkee (3.2 MLD and DPT Saharanpur campus of IIT Roorkee (0.5
MLD). I find that the exemption is available for a Pollution
control and the M/s. UEM India Ltd., nature of contract meant
for sewerage treatment plant does not fulfil the requirement of
the Notification."
(emphasis supplied)
11. Shri B.L. Narasimhan, learned counsel for the appellant
made the following submissions under the following heads:
A
Order is beyond the show cause notice
(i) Since the proposal in the show cause notice was
solely on the ground that the appellant was
rendering commercial construction services, the
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impugned order has gone beyond the show cause
notice by confirming the demand on a wholly
different footing, namely that the ETPs constructed
by the appellant for ONGC were located in a factory
and the STP constructed for NBCC did not qualify
as an effluent treatment plant. To support this
contention that an order cannot go beyond the
show cause notice, reliance has been placed on
the following decisions:
a) Reckitt & Coleman of India Ltd. vs. CCE7; and
b) Toyo Engineering India Limited vs. CC, Mumbai8.
B
ETPs Constructed for ONGC
(i) The only question is whether the oil fields of ONGC,
which are registered under the Mines Act, would qualify
as a 'factory'. As per section 65B of the Finance Act, in a
situation where a word or expression is not defined
under the Finance Act, reference may be drawn to the
Excise Act under which a factory is a premise where
'goods are either manufactured' or a 'process in relation
to their manufacturing is undertaken'. Extraction of
crude oil does not qualify as manufacture, as the activity
involving extraction of natural resources would quality
as 'production', which is independent and different to
manufacture. In this connection, reliance has been
placed on the following decisions:
7. 1996 (88) E.L.T. 641 (S.C.)
8. 2006 (201) E.L.T. 513 (S.C.)
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a) Commissioner of Income Tax vs. NC Budharaja &
Co.9;
b) Chowgule and Co. Private Limited vs. Union of
India10;
c) Commissioner of Income Tax vs. Singareni Colleries
Limited11;
d) Commissioner of Income Tax vs. Sesa Goa Limited12;
e) Commissioner of Income Tax vs. Sesa Goa Limited,
DO Bandodkar and Songs Private Limited; and
Chowgule and Co. Limited13; and
f) Chrestien Mica Industries Limited vs. State of Bihar
and Another14; and
(ii) The appellant has constructed ETPs in the mines of
ONGC, where ONGC is undertaking the exploration
and extraction of oil and natural gas. Thus, it can
reasonably be inferred that these premises are
mines, which are governed by the Mines Act and
mines cannot be equated to a 'factory'.
C
STPs Constructed for NBCC
(i) An effluent treatment plant would also include STPs
and so benefit of exemption would be available in
respect of the projects undertaken for NBCC; and
(ii) STP is set up for the purpose of removing
pollutants and contaminants from wastewater,
primarily from household sewage. It includes
various processes so as to obtain clean and
9. (1993) 70 Taxman 312 (Supreme Court)
10. 1980 (11) TMI 61 (Supreme Court)
11. 1995 (11) TMI 36- Andhra Pradesh High Court
12. (2005) 142 Taxman 16 (Supreme Court)
13. 2003 (7) TMI 30-Bombay High Court
14. (1961) 12 STC 150.
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environment safe treated waste water. Hence, STP
may be understood as a Wastewater Treatment
Plant;
D
Other Submissions
(i) The appellant is entitled to cum-tax benefit; and
(ii) As the order has dropped majority of the
demands, it shows bona fide on the part of the
appellant and, therefore, no penalties are
imposable.
12. Shri R.K. Majhi, learned Authorised Representative for
the respondent made the following submissions:
(i) The order has not travelled beyond the show
cause notice. The appellant had knowledge of
charges and they replied accordingly. In this
connection reliance has been placed on the
judgment of the Delhi High Court in
Commissioner of Service Tax vs. ICT Ltd15;
(ii) The contention of the appellant that it would be
entitled to exemption under Serial No. 13(d) of
the Notification dated 20.06.2012 is not correct
as oil fields of ONGC would qualify as a 'factory';
and
(iii) The effluent treatment plant will not include STPs
15. 2014 (36) STR 481 (Del.)
10
and so the exemption under Serial No. 13(d) of
the Notification dated 20.06.2012 would not be
available to the appellant.
13. The submissions advanced on behalf of the appellant
and the Department have been considered.
A
Order is beyond the show cause notice
14. The first contention raised by the learned counsel for
the appellant would be examined, if considered necessary,
after the second and the third submissions relating to ETPs
constructed for ONGC and STPs constructed for NBCC are
decided, because in case these two matters are decided in
favour of the appellant it may not be necessary to examine
whether the order went beyond the show cause notice.
B
ETPs constructed for ONGC
15. As noticed above, the demand for ETPs constructed
for ONGC has been confirmed for the reason that the
appellant has constructed the ETPs at the oil fields of
ONGC, which qualify as factory, and would, therefore, not
be exempt under Serial No. 13(d) of the Notification dated
20.06.2012.
16. It is seen that the exemption is available under the
Notification dated 20.06.2012 under Serial No. 13(d) for
construction of an ETP, except when located as a part of a
factory. There is no doubt that the appellant was
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constructing ETPs at the location of the oil exploration
wells (on-shore) of ONGC. The issue that needs to be
decided is whether the oil fields of ONGC, which are
registered under the Mines Act, would qualify as a
'factory'. The term 'factory' has neither been defined under
the Notification nor under the Finance Act, However,
section 65B of the Finance Act provides that in a situation
where a word or expression is not defined under the
Finance Act, reference may be drawn to the Central Excise
Act, 194416.
17. Section 2(e) of the Excise Act defines 'factory' as
under:
"(e) "factory" means any premises, including the
precincts thereof, wherein or in any part of which
excisable goods are manufactured, or wherein or in
any part of which any manufacturing process
connected with the production of these goods is
being carried on or is ordinarily carried on."
18. A close reading of section 2(e) of the Excise Act would
show that the factory can be divided into two types:-
(a) Premises (or precincts thereof) where excisable goods are
manufactured; or
(b) Premises (or part thereof) where a manufacturing process
connected with the production of goods is carried out.
19. Thus, a factory is a premise where 'excisable goods are
either manufactured' or a 'process in relation to their
manufacturing is undertaken'. Extraction of crude oil would
not qualify as 'manufacture' as the activity involving
extraction of natural resources would qualify as 'production',
which is independent and different from 'manufacture'.
16. the Excise Act
12
20. Undertaking of an activity which results in emergence of
a new commodity may amount to 'manufacture', such as in
the case of manufacturing of medicines or cosmetics or
textile. However, extracting of natural resources, including
crude oil would amount to 'production' and not 'manufacture'.
21. In NC Budharaja, the Supreme Court explained the
difference between 'production' and 'manufacture' and
observed that even though 'manufacture' would necessarily
amount to 'production', it is not necessary that 'production'
would always tantamount to manufacture. The relevant
portion of the decision is reproduced below:
"In short, the limited question is whether the
construction of a dam to store water (reservoir) can be
characterised as amounting to manufacturing or
producing an article or articles, as the case may be. The
words 'manufacture' and 'production' have received
extensive judicial attention both under this-Act as well
as Central Excise Act and the various Sales Tax Laws.
The word 'production' has a wider connotation than the
word 'manufacture'. While every manufacture can be
characterised as production, every production need not
amount to manufacture."
22. Reference can also be made to the decision of the
Supreme Court in Chowgule. The dispute was whether the
goods purchased by the assessee would qualify as goods
purchased for use in the 'manufacturing' process of goods.
The assessee was undertaking mining of ore, which was
washed, screened, transported, and mixed with different ores
to arrive at a particular specification. The Supreme Court held
that the process undertaken by the assessee would not
amount to 'manufacture'. The relevant portion of the decision
is reproduced below:
"5. The test that is required to be applied is: does
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the processing of the original commodity bring into
existence a commercially different and distinct
commodity? On an application of this test, it is clear that
the blending of different qualities of ore processing
differing chemical and physical composition so as to
produce ore of the contractual specifications cannot be
said to involve the process of manufacture, since the ore
that is produced cannot be regarded as a commercially
new and distinct commodity from the ore of different
specifications blended together. What is produced as a
result of blending is commercially the same article,
namely, ore, though with different specifications than
the ore which is blended and hence it cannot be said
that any process of manufacture is involved in blending
of ore."
23. In Singareni, the Andhra Pradesh High Court examined
whether winning or excavation of coal from the mines
amounted to production or manufacture. The High Court,
after placing reliance on the decision of the Supreme Court in
N.C. Budharaja, held that the mining or excavation of coal
would qualify as 'production'. The relevant portion of the
judgment is reproduced below:
"In Webster's New International Dictionary, the word
"produce" is defined as "something that is brought forth
or yielded either naturally or as a result of effort and
work". In Shorter Oxford English Dictionary, the
following meaning is given: "To bring forward, bring
forth or not; to bring into being or existence". The
meaning given in Black's Law Dictionary to the
expression "produce" is "To bring forward; to show or
exhibit; to bring into view or notice; to bring to the
surface".
Applying the principle of interpretation spelt out
by the Supreme Court in the aforementioned
decision and the ordinary meaning of the word
"produce" as disclosed by the dictionaries and by
its ordinary connotation, we have no doubt in our
mind that the activity of winning or excavating the
coal from the mines can be aptly described as
production activity. It is common to use the
expression that the coal or ore is produced from the
mine and the statistics of total production of coal or
other minerals are required to be given under the
statutory provisions governing mines and minerals."
(emphasis supplied)
24. In Sesa Goa, the Supreme Court held that extraction of iron ore
14
would amount to 'production'. However, the Supreme Court had not
addressed the question as to whether extraction of iron ore would
amount to 'manufacture'.
25. In Chrestien Mica, the Supreme Court held that the process of
mining mica would amount to 'production'.
26. Learned Authorised Representative appearing for the Department
however, placed reliance upon the decision of the Supreme Court in
Vikram Cement vs. Commissioner of Central Excise, Indore 17
and the decision of the Andhra Pradesh High Court in Ultra Tech
Cement Ltd. vs. Commissioner of Central Excise, Hyderabad18 to
contend that captive mines are integral part of factory.
27. In Vikram Cement, the Supreme Court observed that
Modvat/CENVAT credit on capital goods, if the mines are captive mines
so that they constitute one integrated unit together with the concerned
cement factory, will be available to the assessee.
28. In Ultra Tech Cement, the Andhra Pradesh High Court followed
the decision of the Supreme Court in Vikram Cement.
29. The decision of the Supreme Court does not hold, as contended
by the learned Authorised Representative, that captive mines are
integral part of the factory.
30. Learned Authorised Representative appearing for the Department
also placed reliance upon the decision of the Supreme Court in
Collector of Central Excise vs. Rajasthan State Chemical
Works19. The exemption under a Notification was available only when
the goods were manufactured without the aid of power at any stage of
17. 2006 (197) E.L.T. 145 (S.C.)
18. 2014 (308) E.L.T. A121 (A.P.)
19. 1991 (55) E.L.T. 444 (S.C.)
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a process. The Supreme Court examined what activity would amount
to 'process' in or 'in relation to manufacture of goods' for the
application of the Notification. It is in this context that the Supreme
Court observed as follows:
11. Manufacture implies a change but every change is not
manufacture, yet every change of an article is the result of
treatment, labour and manipulation. Naturally, manufacture
is the end-result of one or more processes through which
the original commodities are made to pass. The nature and
extent of processing may vary from one class to another. There
may be several stages of processing, a different kind of
processing at each stage. With each process suffered the
original commodity experiences a change. Whenever a
commodity undergoes a change as a result of some operation
performed on it or in regard to it, such operation would amount
to processing of the commodity. But it is only when the
change or a series of changes take the commodity to the
point where commercially it can no longer be regarded
as the original commodity but instead is recognised as a
new and distinct article that a manufacture can be said
to take place.
12. Manufacture thus involves series of processes. Process in
manufacture or in relation to manufacture implies not only the
production but the various stages through which the raw
material is subjected to change by different operations. It is the
cumulative effect of the various processes to which the raw
material is subjected to, manufactured product emerges.
Therefore, each step towards such production would be a
process in relation to the manufacture. Where any particular
process is so integrally connected with the ultimate production
of goods that but for that process manufacture or processing of
goods would be impossible or commercially inexpedient, that
process is one in relation to the manufacture.
13. The natural meaning of the word `process' is a
mode of treatment of certain materials in order to
produce a good result, a species of activity performed on
the subject-matter in order to transform or reduce it to a
certain stage. According to Oxford Dictionary one of the
meanings of the word `process' is "a continuous and regular
action or succession of actions taking place or carried on in a
definite manner and leading to the accomplishment of some
result." The activity contemplated by the definition is perfectly
general requiring only the continuous or quick succession. It is
not one of the requisites that the activity should involve
some operation on some material in order to its
conversion to some particular stage. There is nothing in the
natural meaning of the word `process' to exclude its application
to handling. There may be a process which consists only in
handling and there may be a process which involves no
handling or not merely handling but use or also use. It may be
a process involving the handling of the material and it need not
be a process involving the use of material. The activity may be
subordinate but one in relation to the further process of
manufacture.
16. A process is a manufacturing process when it brings
16
out a complete transformation for the whole components
so as to produce a commercially different article or a
commodity. But, that process itself may consist of several
processes which may or may not bring about any change at
every intermediate stage. But the activities or the operations
may be so integrally connected that the final result is the
production of a commercially different article. Therefore, any
activity or operation which is the essential requirement and is
so related to the further operations for the end-result would
also be a process in or in relation to manufacture to attract the
relevant clause in the exemption notification. In our view, the
word `process' in the context in which it appears in the
aforesaid notification includes an operation or activity in
relation to manufacture.
(emphasis supplied)
31. Thus, what follows from the above decisions is that there is a
distinction between 'production' and 'manufacture' and extraction of
natural resources (including crude oil) would amount to 'production'
and not 'manufacture'.
32. Keeping in mind the aforesaid principles, it has to be determined
whether a premise where only production takes place, would qualify as
a factory. As noticed above, a factory would include a premise where
excisable goods are manufactured or where a manufacturing process in
connection with production of goods is carried out.
33. Thus, when the activity in relation to extraction of natural
resources does not amount to manufacture the first part of the
definition of factory would not be applicable. The scope of the second
part which includes a manufacturing process in connection with
production of goods caters to post-production processes which are in
relation to 'manufacture'. This would include activities such as washing
of coal; or withering of tea leaves; or refining of crude oil. This would
be a manufacturing process, which is in connection with production.
34. The definition of 'factory' caters to manufacturing processes in
respect of both, manufactured and 'non-manufactured goods'. In case
17
of manufactured goods, the premise where the manufacturing activity
is undertaken would qualify as a factory. In case of non-manufactured
goods such as natural resources, the premises where the post-
production processes take place towards making the produce
commercially viable would qualify as a factory.
35. It, therefore, follows that the oil fields of ONGC, where only
extraction of crude oil takes places, would not qualify as a 'factory'.
36. The Commissioner, therefore, committed an error in denying the
benefit under Serial No. 13(d) of the Notification dated 20.06.2012.
C
STPs Constructed for NBCC
37. In regard to the STPs constructed by the appellant for NBCC, the
exemption under Notification dated 20.06.2012 has been denied for
the reason that the exemption is available only in respect of 'pollution
control plants' and ETPs, and since STP is neither a pollution control
plant nor an ETP, the benefit would not be available to the appellant.
38. It is a fact that the STP is set up for the purpose of removing
pollutants and contaminants from wastewater, primarily from
household sewage. It includes various processes so as to obtain clean
and environment safe treated waste water. Hence, STP may be
understood as a Wastewater Treatment Plant.
39. Oxford Dictionary of English (Third Edition)s defines 'sewage'
as 'waste water and excrement conveyed in severs'.
40. English Dictionary for Advanced Learners defines 'sewage'
as 'sewage is waste matter such as faeces or dirty water from homes
and factories, which flows away through sewers'.
41. To understand whether STP would also be covered under the
18
scope of ETP, it is necessary to find out the meaning of the term
'effluent'.
42. Cambridge Dictionary defines 'effluent' as under:
"liquid waste that is sent out from factories or places
where sewage is dealt with, usually flowing into rivers,
lakes, or the sea."
43. The Merriam-Webster Dictionary defines 'effluent' as follows:
"effluent noun
Definition of effluent (entry 2 of 2)
: something that flows out: such as
a: an outflowing branch of a main stream of lake
b: waste material (such as smoke, liquid industrial refuse, or
sewage) discharged into the environment especially when
serving as a pollutant"
44. The Oxford Dictionary of English (Third Edition), defines
'sewage' as follows:
"Liquid waste or sewage discharged into a river or the sea:
industrial effluent"
"Contamination with trade effluents"
45. It follows that 'effluent' means any waste material which is
discharged into the environment (lake or river), including sewage. A
treatment plant for management of effluent would, therefore, also
include a sewage treatment plant.
46. The Commissioner failed to appreciate the purpose of both the
treatment processes. The exemption benefit provided by Notification
dated 20.06.2012 at Serial No. 13(d) would, therefore, be available to
the appellant.
47. In this view of the matter, it would not be necessary to examine
the contention raised at 'A' by the learned counsel for the appellant
that relates to the order being beyond the show cause notice.
48. Thus, for the reasons stated above, the Commissioner
committed an illegality in denying the benefit of the Notification dated
19
20.06.2012 at Serial No. 13(d) to the appellant for ETPs constructed
for ONGC and the STPs constructed for NBCC. The impugned order
dated 27.10.2015 passed by the Commissioner, therefore, cannot be
sustained and is set aside. The appeal is, accordingly, allowed.
(Order Pronounced on 12.08.2021)
(JUSTICE DILIP GUPTA)
PRESIDENT
(P V SUBBA RAO)
MEMBER (TECHNICAL)
JB
20
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
SERVICE TAX APPEAL NO. 50293 OF 2016
(Arising out of Order-in-Original No. DL SV TAX002COM0011516dated 27.10.2015
passed by Commissioner of Service Tax, Delhi-II)
M/s. UEM India Limited ...Appellant
Versus
Commissioner, Service Tax ...Respondent
Commissionerate, Delhi-II
APPEARANCE:
Shri B. L. Narasimhan, Advocate for the Appellant
Shri R. K. Majhi, Authorized Representative for the Respondent
CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL)
Date of Hearing: July 06, 2021
Date of Decision: August 12, 2021
ORDER
Order pronounced.
(JUSTICE DILIP GUPTA) PRESIDENT (P. ANJANI KUMAR) MEMBER (TECHNICAL) JB