Bombay High Court
The Commissioner Of Service Tax vs Surindra Engineering Co. Ltd on 21 October, 2022
Bench: Dhiraj Singh Thakur, Abhay Ahuja
CEXA-54-2019-J.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CENTRAL EXCISE APPEAL NO. 54 OF 2019
Digitally
signed by The Commissioner of Service Tax, ]
SHRADDHA
SHRADDHA KAMLESH
KAMLESH TALEKAR
Mumbai-VII Commissionerate, 2nd Floor, ]
TALEKAR Date:
2022.10.21
M.S.E.B. Building, Matunga, Labour ]
17:16:31
+0530 Camp, Dharavi, Mumbai 400 019. ].. Appellant
VERSUS
]
M/s. Surindra Engineering Co. Ltd. ]
Surendra House, Safed Pool, M.V. Road, ].. Respondent
Saki Naka, Mumbai - 400 071
****
Mr.Swapnil Bangur i/b Mr.Padmakar S. Patkar, Advocate for
appellant.
Mr.Prakash Shah with Mr.Jas Sanghavi i/b PDS Legal, Advocate
for respondent.
****
CORAM : DHIRAJ SINGH THAKUR AND
ABHAY AHUJA, JJ.
Pronounced on : 21st October 2022
JUDGMENT
PER DHIRAJ SINGH THAKUR, J :
1. This appeal has been fled under section 35G of the Central
Excise Act, 1944 read with Finance Act, 1994 against the order
dated 14th August 2014 passed the Customs Excise and Service
Shraddha Talekar, PS 1/7
CEXA-54-2019-J.doc
Tax Appellate Tribunal, Mumbai (CESTAT), whereby the appeal
preferred by the appellant herein was dismissed as withdrawn,
and the one fled by the respondent was allowed.
2. The following questions of law have been framed for our
consideration :
(i) Whether laying, connecting, joining pipeline for
water supply project falls within "Erection,
Commissioning or installation Service" as defned under
section 65(105)(zzd) of the Finance Act, 1994 and is
taxable under the Service Tax?
(ii) Whether the respondent-assessee is entitled for
abatement under Notifcation No.1 of 2006, dated 1 st
March 2006?
3. Briefy stated the material facts are as under :
(a) The assessee undertakes the job of erection and
commissioning of project work of laying of pipelines. It was
observed that for the fnancial years 2003-04, 2004-05,
2005-06 and 2006-07, the assessee had received different
amounts in respect of erection and commissioning/
installation work on account of which no service tax was
paid. It was stated that rendering of service of erection and
commissioning, as defned under section 65(105)(zzd) of the
Finance Act, 1994, made the assessee liable to levy of
Shraddha Talekar, PS 2/7
CEXA-54-2019-J.doc
service tax with the effect from 1st July 2003.
(b) A show cause notice was issued to the assessee which
was adjudicated upon by the order in original dated 7 th
January 2010 by the Commissioner, Service Tax, Mumbai. It
was held that the service tax rendered by the assessee fell
under the category of "erection, commissioning and
installation service".
(c) An appeal was preferred before the CESTAT, by the
assessee, as also by the appellant herein, to the extent that
the adjudicating authority had allowed the beneft of
abatement under Notifcation No.01 of 2006, dated 1st March
2006.
4. The Tribunal, vide order impugned dated 14 th August 2014,
held that the activity of laying of pipelines for water supply
projects would not come under the category of erection,
commissioning and installation service. For this, it relied upon in
the case of Commissioner of C.Ex., Tiruchirapalli Vs. Indian
Hume Pipe Co. Ltd. 1, on the ground that the facts in both cases
were identical. Reliance was also placed on the Board's Circular
1 2015 (4)S.T.R. 214 (Mad.)
Shraddha Talekar, PS 3/7
CEXA-54-2019-J.doc
No.123/5/2010 TRU, dated 24th May 2010, which prescribes that
unless the activity undertaken results in the emergence of an
erected, installed and commissioned plant, machinery, equipment
or structure, the activity would not come under the category of
erection, commissioning and installation service. It was held that
the pipelines could not be construed as plant, machinery or
equipment or structure. The said Circular was also relied upon to
the extent it clarifed that laying of cables under or alongside road
or railway tracks, etc. was not a taxable service under section
65(105)(zzd) of the Finance Act, 1994 and on that analogy held
that laying of pipeline also would not be construed as a taxable
service.
The Tribunal also observed that a similar view had been
taken in the case of Commissioner of S.T., Mumbai Vs. Hyundai
Heavy Industries Co. Ltd.2, wherein it was held that laying of
submarine pipelines would not come within the purview of
erection, commissioning and installation service and that would
be more appropriately classifable under "commercial or industrial
construction service" in terms of section 65(25b)(b) of the Finance
Act. The Tribunal accordingly allowed the appeal of the assessee
2 2014(33)S.T.R. 111 (Tri. Mumbai)
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CEXA-54-2019-J.doc
and set aside the order passed by the Adjudicating Authority. As a
necessary consequence, the appeal fled by the revenue was
dismissed.
5. Counsel for the respondent Mr.Shah initially tried to support
and buttress the view expressed by the Tribunal by placing
reliance upon the case of Indian Hume Pipe Co. Ltd. (Supra),
wherein it was held that the activity of laying distance pipelines to
supply water, in public interest, was a part of a 'construction
activity' not commercial in nature and accordingly not covered
under 'erection, commissioning and installation service'. The SLP
preferred against the said judgment is also stated to have been
dismissed by the Hon'ble Supreme Court vide order dated 29 th
April 2016.
6. In the alternate, counsel for the respondent Mr.Shah
questioned the maintainability of the present appeal itself before
this Court in view of the provisions of section 35L of the Central
Excise Act, 1944 ( for short, 'The Excise Act') which reads as
under :
35L. (1) Appeal to Supreme Court.--An appeal shall lie to the
Supreme Court from--
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CEXA-54-2019-J.doc
(a) any judgment of the High Court delivered--
(i) in an appeal made under section 35G; or
(ii) on a reference made under section 35G by the
Appellate Tribunal before the 1st day of July, 2003;
(iii) on a reference made under section 35H, in any
case which, on its own motion or on an oral
application made by or on behalf of the party
aggrieved, immediately after passing of the judgment,
the High Court certifes to be a ft one for appeal to the
Supreme Court; or
(b) any order passed before the establishment of the
National Tax Tribunal by the Appellate Tribunal relating,
among other things, to the determination of any question
having a relation to the rate of duty of excise or to the
value of goods for purposes of assessment.
(2) For the purpose of this Chapter, the determination of
any question having a relation to the rate of duty shall
include the determination of taxability or excisability of
goods for the purpose of assessment.
7. Sub-section (2) to section 35L was inserted with effect from
6th August 2014, i.e., prior to the passing of the order impugned in
the present appeal by the CESTAT. Even otherwise, this Court in
the case of Commissioner of Central Excise, Mumbai-V Vs.
has held that insertion of sub-section
(2) to section 35L was clarifcatory, and therefore, the issue of
taxability and excisability would be an issue relating to rate of
duty of excise/services for the purpose of assessment for which
an appeal from the order of the Tribunal could be entertained only
3 2020 (372) E.L.T. 220 (Bom.)
Shraddha Talekar, PS 6/7
CEXA-54-2019-J.doc
by the Hon'ble Supreme Court and not by the High Court in terms
of sections 35G of the Excise Act.
8. In view of the clear mandate, sub-section (2) of section 35L
of the Excise Act, since the issue involved in the present appeal
pertains to whether the service rendered by the assessee is a
taxable service or not, in our opinion, this Court would have no
jurisdiction to entertain the appeal.
9. Be that as it may, we hold that the present appeal is not
maintainable before this Court leaving it free to the appellant to
avail its remedies under law.
10. The appeal is accordingly disposed of.
[ ABHAY AHUJA, J.] [DHIRAJ SINGH THAKUR, J.]
Shraddha Talekar, PS 7/7
