RELIANCE MICHIGAN Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appeal is directed against Order -in -Original No. 3/KLG/Th -11/2009, dated 13 -8 -2009 passed by the Commissioner of Central Excise, Thane -II. The appellant, M/s. Reliance Michigan (JV) (RMJV in short) was awarded a contract by Mumbai Metropolitan Region Development Authority (MMRDA in short) in respect of a work titled as (i) Widening and Desilting of Mithi River from Mahim Causeway to Dharavi Bridge in BKC, and (ii) Vakola Nalla from Vakola Bridge to SCLR in BKC". In respect of the said work, the appellants were paid an amount of Rs. 8,36,58,054/ - for work (i) and Rs. 2,41,61,270/ - for work (ii) during the period 5 -5 -2006 to 31 -7 -2007. However, the appellant did not discharge any Service Tax liability on the said activity. Accordingly, a show cause notice dated 6 -9 -2007 was issued demanding Service Tax on the activity undertaken by the appellant under the category of 'Dredging Service' as defined under Section 65(36)(a) of the Finance Act, 1994 read with Section 65(145) for an amount of Rs. 91,73,081/ - along with interest thereon and also proposing to impose penalties. The appellant contested the levy of Service Tax on the ground that the Mithi River is not a River but a Nalla and, therefore, the services rendered by them does not amount to dredging of a river and accordingly, they are not liable to pay Service Tax. The show cause notice was adjudicated and the demand was confirmed along with interest thereon and a penalty of Rs. 1 crore was imposed on the appellant under Section 78 of the Finance Act, 1994 apart from penalty of Rs. 5000/ - under Section 77. Hence, the appellant is before us.

(2.) THE learned counsel for the appellant makes the following submissions: -

(3.) WE have carefully considered the submissions made by both the sides. We have also perused the records of the case which includes the Tender Notice, the contract awarded and the affidavit filed by the Government of Maharashtra before the Hon'ble High Court of Bombay in Writ Petition No. 2116 of 2005.