Decided on April 30,2015

C.C. And C. Ex., Panaji Goa Appellant
Vrindavan Engineers And Contractors (I) (P.) Ltd. Respondents


M.V.RAVINDRAN,MEMBER (J) - (1.)Revenue has filed this appeal against the impugned Order -in -Appeal passed by Commissioner (Appeals). The short issue is whether the respondent, while executing a work order awarded to them by Goa State Urban Development Agency (GSUDA) for a project name "Construction of Market -cum -Community Hall and Park, Phase -I Land Development" had provided the taxable service of "Site formation and clearance, excavation and earth moving and demolition" under Sec. 65(97a) of the Chapter V of the Finance Act, 1994. According to Revenue the entire contract is for pre -construction activities i.e. land development, which in the instant case consists of a series of activities to make the site suitable for further construction. The ld. Counsel appearing for the respondent, on the other hand, contends that they were awarded a works contract for construction of Market -cum -Community Hall Phase -I, on the basis of a tender. It was execution of a works contract for the Government of Goa. He further stated that the character of the work was construction of market -cum -community hall and not the activity of the land development.
(2.)Heard both sides and considered the submissions.
(3.)We find that the Agreement executed between the respondent and GSUDA is for executing works of "Construction of market -cum -community hall and park, Phase -I Land development, hereinafter called the works". The show cause notice states that the land development work undertaken by the respondent consisted of earth work excavation, construction of embankments, channels for rain run off with stone pitching and underground NP Pipes across the roads with RCC Chambers at the ends, boundary retaining wall etc. We have seen the schedule of quantities submitted by the respondent which gives the quantity, rate and amount under the following Sec. heads : earthwork, stonework, plain and reinforced cement concrete, formwork, and steel, miscellaneous. The details of work under these Ss. also includes RCC for foundations, bases of columns etc.; construction of walls up to floor two level; suspended floors, roofs, shelves and their support balconies; steel reinforcement for RCC Work, providing fabricating and erecting trap gates as well as reinforced cement concrete pipes. To decide whether all these activities would be covered under the ambit of service of site formation, we may reproduce the definition below:
"(97a) "site formation and clearance, excavation, and earthmoving and demolition" includes, -

• Drilling, boring and core extraction services for construction, geophysical, geological or similar purposes; or

• Soil stabilization; or

• Horizontal drilling for the passage of cables or drain pipes; or

• Land reclamation work; or

• Contaminated, top soil stripping work; or

• Demolition and wrecking of building, structure or road, but does not include........................."

From the above definition we find that the site formation basically refers to earth work or activities related to earthwork or, at the most, drilling for the passage of cables or drain pipes. Whereas the activities undertaken by the respondent indicate a comprehensive works contract which includes appreciable RCC work for foundations, columns and walls apart from construction of walls, laying of pipes. The definition includes creation of passages for pipes. It does not include laying of pipes itself. There is merit in the finding of the Commissioner (Appeals) that if such works are held to be taxable under the site formation service, then every such project would involve the activity of site formation. Revenue could at most tax only that part of the contract which involves site formation and related earthwork and not the entire works. But that has not been done by Revenue. Be that as it may, the total activities undertaken cannot be categorized under the Site Formation service. The nature of work is more akin to a comprehensive works contract. It is not the argument of Revenue that the same may be split up into components including the component of site formation. Therefore, we hold that the work undertaken by the respondent cannot be termed as an activity of "Site formation and clearance, excavation & earthmoving & demolition".

Accordingly, appeal of Revenue is dismissed.

(Pronounced and dictated in Court)


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