Case Note & Summary
The appeal was filed by the Commissioner of Service Tax, Mumbai-VII Commissionerate, under section 35G of the Central Excise Act, 1944 read with Finance Act, 1994, against the order dated 14th August 2014 passed by the Customs Excise and Service Tax Appellate Tribunal, Mumbai (CESTAT). The CESTAT had dismissed the appellant's appeal as withdrawn and allowed the respondent's appeal. The respondent-assessee, M/s. Surindra Engineering Co. Ltd., undertakes the job of erection and commissioning of project work of laying of pipelines. For the financial years 2003-04, 2004-05, 2005-06, and 2006-07, the assessee received amounts in respect of erection and commissioning/installation work but did not pay service tax. The revenue contended that the assessee was liable to pay service tax under 'Erection, Commissioning or Installation Service' as defined under section 65(105)(zzd) of the Finance Act, 1994. The questions of law framed were whether laying, connecting, joining pipeline for water supply project falls within that definition and is taxable, and whether the assessee is entitled to abatement under Notification No.1 of 2006 dated 1st March 2006. The court, after considering the material facts, held that the activity of laying pipelines constitutes erection and commissioning/installation service and is taxable. The court also held that the assessee is entitled to abatement under the notification. The appeal was dismissed.
Headnote
A) Service Tax - Erection, Commissioning or Installation Service - Taxability - Laying of pipelines for water supply project falls within the definition of 'Erection, Commissioning or Installation Service' under section 65(105)(zzd) of the Finance Act, 1994 and is taxable under Service Tax - The court held that the activity of laying, connecting, and joining pipelines constitutes erection and commissioning/installation service, and the assessee is liable to pay service tax (Paras 2-3). B) Service Tax - Abatement - Entitlement - The respondent-assessee is entitled to abatement under Notification No.1 of 2006 dated 1st March 2006 - The court held that the assessee is eligible for the benefit of abatement as per the notification (Paras 2-3).
Issue of Consideration
Whether laying, connecting, joining pipeline for water supply project falls within 'Erection, Commissioning or Installation Service' as defined under section 65(105)(zzd) of the Finance Act, 1994 and is taxable under Service Tax; and whether the respondent-assessee is entitled for abatement under Notification No.1 of 2006 dated 1st March 2006.
Final Decision
The appeal is dismissed. The questions of law are answered in favor of the respondent-assessee: laying, connecting, joining pipeline for water supply project falls within 'Erection, Commissioning or Installation Service' and is taxable, and the respondent is entitled to abatement under Notification No.1 of 2006.
Law Points
- Erection
- Commissioning or Installation Service
- Service Tax
- Abatement
- Notification No.1 of 2006
- Finance Act
- 1994
- Section 65(105)(zzd)
- Central Excise Act
- 1944
- Section 35G
