Service Tax Appeal No. 530 of 2012
Service Tax Miscellaneous (CO) Application No. 39 of 2012
(Arising out of OIO-04/STC/COMMR-I/BRC-I/2012 dated- 31/08/2012 passed by
Commissioner of Central Excise, Customs and Service Tax-Vadodara-I)
C.C.E & S.T.- Vadodara -I
VERSUS
M/s Randhawa Construction Company
APPEARANCE:
Shri G. Kirupanandan, Superintendent (AR) for the Appellant
Shri K.J Kinariwala, Consultant for the Respondent
CORAM:
HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL)
HON’BLE MR. RAJU, MEMBER (TECHNICAL)
Final Order No. A/ 10154 /2023
DATE OF HEARING: 23.09.2022
DATE OF DECISION: 23.01.2023
RAMESH NAIR
The present appeal has been preferred by the Revenue against Order
in-Original No. 04/STC/COMMR-I/BRC-I/2012 dated 31.08.2012 passed by
the Learned Commissioner, Central Excise &Service Tax, Vadodara-I,
whereby the Learned Commissioner has dropped the service tax demand
proposed in Show Cause Notices dated 26-06-2012 issued on M/s.
Randhawa Construction Company under the category of “Site Formation and
Clearance, Excavation and Earthmoving and Demolition Service.
1.2 Briefly stated, the facts of the case are that during the course of audit
of the records of the respondent-assessee, it was noticed by the department
that the assessee had entered into an agreement with M/s Reliance
Engineering Associates Pvt. Ltd., Navi Mumbai and undertook dismantling
activities during the year 2007-08. The assessee, for the year 2007-08 has
shown contract receipts for “dismantling” in their ledgers as Rs.
5,38,53,858/- for which they were required to pay Service tax under the
category of “Site Formation and Clearance, Excavation and Earthmoving and
Demolition” Service amounting to Rs. 66,56,337/-. Accordingly, a show
cause notice dated 26.06.2012 was issued to the assessee proposing the
recovery of service tax along with interest. In adjudicating, the Ld.
Commissioner vide impugned order dropped the demand of service tax.
Therefore, this appeal by the Revenue.
2.
Shri G.Kirupanandan, Superintendent (AR) appearing on behalf of
Revenue reiterates the grounds of appeal. He submits that demand of
service tax has been dropped by the adjudicating authority on the sole
ground that the activity “Dismantle” is different from the activity
“demolition” and hence the same is outside the scope of the taxable services
viz. “Site Formation and Clearance, Excavation and Earthmoving and
Demolition.” However, in the definition of said services the word „includes‟
appears that the list of services given in the definition is merely illustrative
and not exhaustive and that services like dismantling is also covered by the
definition of “Site formation and clearance, excavation and earthmoving and
demolition”. The Commissioner while dropping the demand has taken into
account the dictionary meaning of words „demolition‟ & „dismantling‟ and by
distinguishing both the words, he has arrived at the conclusion that the
activities undertaken by the assessee is not taxable under the category of “
Site Formation and Clearance, Excavation and Earthmoving and Demolition”.
However, the definition is not exhaustive but is illustrative and the end result
should be „site formation‟.
2.1 He also submits that Para 2.8 of work order dated 14.04.2007 reads
“ All equipment, piping and structures shall be weighed at RELIENCE Weigh
Bridge free of cost and same shall be basis of measurement”. Similarly para
4.4.1 of the same work order which contains the manner/ terms of payment
discloses that the same would be made on production of documentary proof
of weighment and on site clean up as certified by the EIC. The above clauses
give clear picture about the nature of work undertaken by the assessee i.e.
site formation and clearance and in the process obtaining the usable scrap
only to be weighed later on, instead of valued according to the
nature/condition of the items in case of dismantling. This way the activity of
so called “dismantling” as undertaken by the assessee was nothing but an
activity of “site formation” and “clearance”.
- Shri K.J Kinariwala, Learned Consultant appearing on behalf respondent
submits that admittedly as per work order, the activities undertaken by the
Respondent was in respect of dismantling of plant and supporting structure
viz. pipelines/ valves by employing man and machinery specified in the work
order is not demolition in any manner. The word “on site cleanup” used in
the para 4.4.1 of the work order is in respect of removal of man and
machinery after completion of the work and it cannot be considered as Site
Formation and Clearance Service.
We have considered the submissions made by both the sides and
perused the records. In the present case, the issue to be decided is that the
activity of respondent in question is classifiable under the category of
„SiteFormation and clearance, Excavation and Earth Moving and Demolition
service‟ as contended by the revenue or not. For the sake of convenience,
Section 65(97a) are reproduced below :-
“Section 65(97a) “Siteformation and clearance, excavation and
earth moving and demolition” includes –
(i)
Drilling, boring and core extraction services for construction,
geophysical, geological or similar purposes; or
(ii)
Soil stabilization; or
(iii) Horizontal drilling for the passage of cables or drain pipes; or
(iv) Land reclamation work; or
(v)
Contaminated top soil stripping work; or
(vi) Demolition and wrecking of building, structure or road,
But does not include such services provided in relation to
agriculture, irrigation, watershed development and drilling, digging,
repairing, renovating or restoring of water sources or water bodies
4.1 We also gone through the work order dtd. 14.04.2007 issued to the
respondent wherein in clause 2.0 scope of work provide as under :
2.0 Contractors Scope of Work :
2.1. Tagging and marking of all equipments, piping and structures
connected with equipment and pipe supports as per approved
philosophy.
2.2. Removal of all auxiliary connection, where required.
2.3 Loosing of foundation bolts, disconnection of piping by
unbolting with equipment, values etc.
2.4 Removal of piping where it is bolted or by cutting the joints at
suitable location.
2.5 Dismantling of pipe support, structures for tanks
/vessels/Columns /equipments, supporting structures, ladders and
platforms.
2.6 Unbolting foundation bolts of equipments, lifting and shifting to
la-down area
2.7 Loading all equipment, Piping and structural materials on
Reliance supplied trailers/ trucks and lashing properly.
2.8 All equipment, piping and structures shall be weighed at Relene
weight bridge free of cost and same shall be basis of measurement.
2.9. All required cranes and trailers for above job shall be supplied
by contractor at Relene, Dismantling site.
4.2 On careful consideration of the above extracted definitions, vis-a-vis,
the facts of the case and scope of work, we find that the appellant had
merely carried out dismantling activity. This activity, in no way, can be
considered as a taxable service under the category of “site formation and
clearance, excavation and earthmoving and demolition service” inasmuch as
the work assigned under the work order for do not attract any of the clauses
itemized in the definition provided under Section 65(97a) ibid. Thus, in our
considered view, the activities undertaken by the appellant will not fall under
the taxing net for levy of service tax under the disputed taxable service.
There is merit in the finding of the Ld. Commissioner. Therefore, we are of
the considered view thatthe work undertaken by the respondent cannot be
termed as an activity of “Siteformation and clearance, excavation &
earthmoving & demolition”.
- Accordingly, the impugned order is upheld. Appeal filed by the Revenue
is dismissed. CO also disposed of.
(Pronounced in the open court on 23.01.2023)
RAMESH NAIR
MEMBER (JUDICIAL)
RAJU
MEMBER (TECHNICAL)
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