IMPORTANT POINT
Validity of Circular explaining Rule 3(3) of 2007 Rules.

JUDGMENT

Anil R. Dave, J.-Leave granted.

2. This appeal arises from the judgment and final order dated 7th June, 2010, passed by the High Court of Andhra Pradesh in Writ Petition No. 6558/2008, whereby the High Court dismissed the petition filed by the appellant and upheld the validity of the Circular No. 98/1/2008-ST, dated 4.1.2008 (hereinafter referred to as ‘the Impugned Circular’) issued by respondent no. 1 herein.

3. The appellant had executed various contracts which were in the nature of composite construction contracts. The appellant had paid Sales Tax/ VAT on those contracts under the Andhra Pradesh General Sales Tax Act, 1957, Andhra Pradesh Value Added Tax Act, 2005 and other State enactments. Service tax was imposed on various services which had come into effect from different dates. Prior to 1.6.07, the appellant had paid service tax under the following categories of taxable services, namely:

(a) Erection, commissioning or installation service under Section 65(105) (zzd) of the Finance Act, 1994 (hereinafter referred to as ‘the Act’),

(b) Commercial or industrial construction service under Section 65(105) (zzq) of the Act,

(c) Construction of complex (residential complex) service under Section 65(105) (zzzh) of the Act.

4. Sub-sections 39(a), 25(b) and 30(a) of Section 65 of the Act define the above mentioned services as under:

“39(a): erection, commissioning or installation; means any service provided by a commissioning and installation agency, in relation to,-- (i) erection, commissioning or installation of plant machinery, equipment or structures whether pre-fabricated or otherwise; or

(ii) installation of -

(a) electrical and electronic devices, including wirings or fittings therefore; or

(b) plumbing, drain laying or other installations for transport of fluids; or

(c) heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work; or

(d) thermal insulation, sound insulation, fire proofing or water proofing; or

(e) lift and escalator, fire escape staircases or travelators; or

(f) such other similar services;” This definition, with reference to the taxable service, is dealt with by Clause (zzd).

5. The taxable services covered by Clause (zzq) (commercial or industrial construction services) are defined in sub-section 25(b) of Section 65 of the Act, which reads as under:

“(25b): commercial or industrial construction service means-

(a) construction of a new building or a civil structure or a part thereof; or

(b) construction of pipeline or conduit; or

(c) completion and finishing services such as glazing, plastering, painting, floor or wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services, in relation to building or civil structure; or

(d) repair, alteration, renovation or restoration of, or similar services in relation to, building or civil structure, pipeline or conduit, which is-

(i) used, or to be used, primarily for; or

(ii) occupied, or to be occupied, primarily with; or

(iii) engaged, or to be engaged, primarily in,

commerce or industry, or work intended for commerce or industry, but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams;”

6. The taxable services covered by Clause (zzzh) (construction of complex) are defined in subsection 30 (a) of Section 65 of the Act, which reads as under:

“30(a): “construction of complex” means –

(a) construction of a new residential complex or a part thereof; or

(b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or

(c) repair, alteration, renovation or r