Laying Pipelines for Water Supply Projects - High Court upholds CESTAT ruling in Indian Hume Pipes
Indian Hume Pipes - :
THIS is one of the most cited decisions of the CESTAT in recent times. Prior to 01.06.2007, though at some places, demand notices were issued for payment of service tax on the activities of laying of pipelines for drinking water supply projects undertaken by classifying the service under "Commercial or Industrial Construction Service (CISS)" or "Erection, Commissioning or Installation Service (ECIS)", these demands were successfully contested by the assessees with favourable judgement in case of Indian Hume Pipes 2008-TIOL-1665-CESTAT-MAD. In this case, the Commissioner had found that the assessee had rendered taxable services under the category 'Erection, Commissioning or Installation', which was quashed by the Tribunal.
In the recent celebrated Larger Bench Decision in the case of Lanco Infratech and several others - , the Larger Bench referred to Indian Hume Pipes and observed that from the decision in Indian Hume, it is clear that laying of pipelines/ conduits for transmission of water or for disposal of sewerage falls within the ambit of CICS and not ECIS.
Now, the Indian Hume Pipe is taken by Revenue in appeal to the Madras High Court.
The High Court gave its verdict recently.
The High Court at the outset made it clear that if the dispute was on a finding of fact by the Tribunal, as to whether the activity carried on by the Assessee was a construction activity or an activity of erection, installation and commissioning, then there can be no appeal on such question of fact.
The High Court referred to the recent Larger Bench decision and dismissed the Revenue Appeal.
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