Custom, Excise & Service Tax Tribunal
H M Pipes Pvt Ltd vs Jaipur I.. on 19 October, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH,COURT NO. I
Service Tax Appeal No. 52866 Of 2015
[Arising out of the Order-in-Appeal No. JAI-EXCUS-000-COM-99-14-15 dated
31.03.2015 passed by the Commissioner of Central Excise, Jaipur.]
M/s H. M. Pipes Pvt. Ltd. Appellant
G-47-48, Bagru Industrial Area,
Phase-II, Jaipur
vs
Commissioner, Central Excise Respondent
Commissionerate, Jaipur NCRB, Statue Circle, C- Scheme, Jaipur APPEARANCE:
Mr. Jatin Mahajan, Advocate for the Appellant Mr. Harshvardhan, Authorised Representative for the Department CORAM :
HON'BLE SHRI JUSTICE DILIP GUPTA, PRESIDENT HON'BLE P.V. SUBBA RAO, MEMBER (TECHNICAL) Date of Hearing/ Decision: October 19, 2023 FINAL ORDER NO. 51481/2023 JUSTICE DILIP GUPTA The order dated 31.3.2015 passed by the Commissioner, Central Excise, Jaipur confirming the demand of service tax with interest and penalty has been assailed in this appeal filed by M/s H. M. Pipes Ltd1.
2. It transpires from the records that during the period from April 2013 to September 2013, the appellant provided the 1 the appellant 2 ST/52866/2015 following services to Municipal Corporations/ Municipal Councils:
Sr. Project of Detail Nature of work Taxable value No. from April, 2013 to September, 2013 1 Municipal Counsil, Work of providing laying & 70,85,926/-
Sehore (M.P.) jointing including excavations of pipe trenches, bedding, refilling, testing, commissioning & trial run.
2. Municipal Work order for providing, laying 1,18,14,721/-
Corporation, Rewa & jointing including excavation (M.P.) pipe bedding, refilling testing, commissioning and trial run.
3. Municipal Counsil, Work of providing laying & 81,72,114/-
Sehore (M.P.) jointing including excavations of pipe trenches, bedding, refilling, testing, commissioning & trial run
4. Municipal Counsil, Work of providing laying & 20,67,346/-
Ratlam (M.P.) jointing including excavations of pipe trenches, bedding, refilling, testing, commissioning & trial run
5. Municipal Counsil, Work of providing laying & 18,81,209/-
Sironj (M.P.) jointing including excavations of pipe trenches, bedding, refilling, testing, commissioning & trial run
6. Municipal Counsil, Work order for providing, laying 22,39,434/-
Rewa (M.P.) & jointing including excavation pipe bedding, refilling, testing, commissioning & trial run
7. Municipal Counsil, Work order for providing, laying 1,19,02,729/-
Rewa (M.P.) & jointing including excavation pipe bedding, refilling, testing, commissioning & trial run Total 4,51,63,479/-
3. A show cause notice dated 24.09.2014 was issued to the appellant alleging that the appellant had provided taxable works contract service for the period April 2013 to September 2013, but had not paid the due service tax.
4. The appellant did not file any reply to the show cause notice despite repeated opportunities having been granted to the 3 ST/52866/2015 appellant and so the Commissioner adjudicated the show cause notice on merits. The Commissioner, after examination of the work orders issued to the appellant by the Municipal Corporations/ Municipal Councils, held that the work undertaken by the appellant would fall within Explanation (e) of the definition of "works contract services" under section 65 (105) (zzzza) of the Finance Act, 19942.
5. Shri Jatin Mahajan, learned counsel appearing for the appellant submitted that since the period involved in the present appeal is from April 2013 to September 2013, the issue would have to be examined in terms of the Notification No. 25/2012 dated 20.06.20123 which exempted certain taxable services from the whole of the service tax leviable thereon under section 66B of the Finance Act and at Serial No. 12(e), the services provided to the Government, or local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of pipeline, concrete of plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal is mentioned. Learned counsel also pointed out that local authority has been defined under section 65B (31) of the Finance Act to include Municipality or a Municipal Committee. Learned counsel submitted that as appellant is entitled to exemption under the Notification 2 the Finance Act 3 (Notification dated 20.06.2012) 4 ST/52866/2015 dated 20.06.2012, the Commissioner could not have confirmed the demand of service tax.
6. Shri Harshvardhan, learned authorized representative appearing for the department has, however, supported the impugned order and has contended that it is not open to the appellant to raise this issue at this stage, particularly when the appellant had not filed a reply to the show cause notice.
7. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered.
8. In order to appreciate the contentions, it would be necessary to reproduce the relevant portion of the Notification dated 20.06.2012 and it is as follows:
" In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Ac) 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 17th 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 services tax leviable thereon under section 66B of the said Act, namely:-
12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, filling out, repair, maintenance, renovation, or alteration of-
5 ST/52866/2015
(a) xxxxx xxxxx xxxxx
(b) xxxxx xxxxx xxxxx
(c) xxxxx xxxxx xxxxx
(d) xxxxx xxxxx xxxxx
(e) pipeline, conduit or plant for (i) water supply (ii)
water treatment, or (iii) sewerage treatment or disposal;
or
(f) xxxxx xxxxx xxxxx
9. 'Local Authority' has been defined under section 65B(31) of the Finance Act as follows:
65B (31) "local authority" means-
(a) a Panchayat as referred to in clause (d) of
article 243 of the Constitution;
(b) a Municipality as referred to in clause (e) of
article 243P of the Constitution;
(c) a Municipal Committee and a District Board,
legally entitled to, or entrusted by the
Government with, the control or management of a municipal or local fund;
(d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006 (41 of 2006);
(e) a regional council or a district council constituted under the Sixth Schedule to the Constitution;
(f) a development board constituted under article 371 of the Constitution; or
(g) a regional council constituted under article 371A of the Constitution.
10. A perusal of the seven work orders referred to above leaves no manner of doubt that the services were provided by the appellant to a local authority by way of construction, erection, commissioning of pipeline or water supply. Thus, the services provided by the appellant would be exempted under the 6 ST/52866/2015 Notification dated 20.06.2012, keeping in mind the definition of a local authority under section 65B (31) of the Finance Act.
11. The aforesaid position emerges from a perusal of the show cause notice and the order passed by the Commissioner. Thus, even if the appellant had not filed any reply to the show cause notice, the aforesaid fact would have to be taken into consideration for arriving at a conclusion as to whether the services provided by the appellant to the local authority would be exempted from payment of service tax under the Notification dated 20.06.2012.
12. Such being the position, the impugned order dated 31.3.2015 passed by the Commissioner cannot be sustained and is set aside. The appeal is, accordingly, allowed.
(Order dictated in the open court) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) SB