CESTAT, AHMEDABAD BENCH

Dinesh Chandra Agarwal Infracon (P.) Ltd (vs) Commissioner of Central Excise*, Ahmedabad

Circulars and Notifications : Circular No. 116/10/2009-ST, dated 15-9-2009 Section 65(25b), read with section 65(105)zzq), of the Finance Act, 1994 -

Commercial or Industrial Construction Service - Period June, 2005 to March,2007 - Appellant had laid long distance pipelines for transfer of water in State of Gujarat under contract awarded to it by Gujarat Water Supply and Sewerage Board (GWSSB) - Revenue entertained a view that GWSSB was selling water after purchasing same from various sources and, as such, pipelines laid by appellant were used for commercial or industrial purpose - Accordingly, it was held that services provided by appellant to GWSSB were covered by category of 'Commercial or Industrial Construction Service' and, service tax was demanded from appellant under aforesaid service - It was found that water purchased by GWSSB was being distributed to rural and urban areas for purpose of irrigation and drinking at different rates, which were subsidized - Whether to set up an establishment for water supply is a part of duties and functions of State to provide its citizens with  a better living - Held, Yes - Whether, therefore, it could not be held that laying of pipelines for GWSSB by appellant was for purpose of undertaking any commercial activities by GWSSB - Held, yes - Whether, therefore, services provided by appellant were not covered under 'Commercial or Industrial Construction Service' and no service tax was required to be levied - Held,yes