CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHENNAI REGIONAL BENCH – COURT NO. I Service Tax Appeal No. 40588 of 2020 (Arising out of Order-in-Original No. 45-46 / 2020 dated 19.05.2020 passed by the Commissioner of GST & Central Excise, Newry Towers, No.2054-I, II Avenue, Anna Nagar, Chennai 600 040)

Commissioner of CGST and Central Excise ... Appellant Chennai Outer Commissionerate Newry Towers No.2054 – I II Avenue, Anna Nagar Chennai 600 040 Versus M/s. Va Tech Wabag Limited ... Respondent No.17, Wabag House, 200 Feet Thoraipakkam – Pallavaram Main Road Sunnambu Kolathur, Chennai 600 017 APPEARANCE:

Shri Anoop Singh, Authorised Representative for the Appellant Shri P.K. Sahu, Advocate for the Respondent CORAM:

HON’BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)

HON’BLE MR. AJAYAN T.V, MEMBER (JUDICIAL)

FINAL ORDER No.40624/2025 DATE OF HEARING: 07.04.2025 DATE OF DECISION: 18.06.2025 Per Mr. Ajayan T.V.

The Commissioner of GST & Central Excise, Chennai Outer, Chennai, the appellant herein has taken exception to the impugned Order in Original No.45-46/2020 dated 19.05.2020, whereby the adjudicating authority has dropped the proceedings initiated against the Respondent in terms of the Show Cause Notice No.207/2012 dated 23.04.2012 and subsequent Statement of Demand No.133/2013 dated 22.04.2013.

2. Succinctly, the facts are that the Respondent, is engaged in planning, completion and operation of drinking water and waste water treatment plants for both Municipal and Industrial Sectors and during the relevant period held service tax registration for provision of services under Consulting Engineer Service, Erection, Commissioning or Installation Service, Commercial or Industrial Construction Services, Works Contract Service, Management, Maintenance or Repair Service and Goods Transport Agency Service. Investigation carried out by the department reveals that the Respondent has entered into composite contracts with various parties for design, drawing and detailed engineering construction (Civil Work), procurement, supply, erection, testing, trial run and commissioning of Effluent Treatment Plant, Sewage Plants for lump sum amount, but has not paid service tax towards such Turnkey projects entered prior to 01.06.2007 and executed up to 31.03.2011.

3. The Department was of the view that the services rendered by the Respondent prior to 01.06.2007 would be classifiable under "Erection, Commissioning or Installation Services" and "Commercial or Industrial Construction Service". It also appeared that the Respondent did not pay service tax in respect of the contracts entered before 01.06.2007 even though necessary break-up had been incorporated in the said contracts. Upon the Respondent submitting the details, the department quantified service tax based on such details furnished by the assessee for the years 2006-07 to 2010-11, in respect of contracts entered from 01.07.2003 to 01.06.2007 after allowing abatement of 67% on the gross value as per Notification No. 1/2006 ST and a Show Cause Notice bearing Sl. No. 207/2012 dated 23.04.2012 was issued to the Respondent directing the Respondent to show cause as to why an amount of Rs. 12,77,60,239/-(Rupees twelve crore seventy seven lakh sixty thousand two hundred and thirty nine only) being the service tax payable for the period from 2006-07 to 2010-11 should not be demanded from the assessee under proviso to Section 73(1) of the Finance Act, 1994 along with appropriate interest and penalties should not be imposed under Section 76, 77 and 78 of the Finance Act, 1994. For the subsequent period from April 2011 to March 2012, a Statement of Demand bearing S. No. 133/2013 dated 22.04.2013 was issued to the Respondent under Section 73(1A) of the Finance Act, 1994, placing reliance on the facts and allegations in the previous notice, asking the Respondent to show cause as to why Service Tax of Rs. 55,26,953/- (Rupees Fifty Five Lakh Twenty Six Thousand Nine hundred and Fifty three only) should not