2007 (2) TMI 218 - AT - Service Tax

Appellant submitted that consideration received for erection installation commissioning are not covered under the category of Consulting Engineer Service - service was rendered by the appellant as a sub-contractor and that too for a period prior to July 2003 - held that charges for erection installation commissioning are not taxable under category of Consulting Engineer Service for the period prior to July 2003 further appellant which is sub-contractor is not liable to service tax

Summary

Issues:
1. Whether erection, commissioning, and installation services are liable to Service Tax under the category of 'Engineering Consulting Service'.

Analysis:
1. The appellant contested the liability of Service Tax on the consideration received for erection, commissioning, and installation services provided as a sub-contractor. The appellant relied on a Tribunal decision and a CBEC Circular to support the argument that these services do not fall under the category of "Consulting Engineer Service" for the relevant period.

2. The appellant argued that previous Tribunal decisions had held that charges for erection, installation, and commissioning are not covered under "Consulting Engineer Service" for the period before July 2003. The appellant also contended that since they were a sub-contractor for the Principal Contractor, they should not be liable for service tax. However, the authorities below had ruled against the appellant, stating that the services provided fell under "Consulting Engineer Services" and were rendered as a sub-contractor before July 2003.

3. The Departmental Representative cited relevant notifications and a case law to support the position that the authorities were correct in levying tax on the appellant. The DR also referenced a CBEC Circular issued after the assessment of the appellant, arguing that there was no merit in the appellant's arguments for relief.

4. Considering the judicial discipline and previous Tribunal orders favoring the assessee, along with the applicability of the CBEC Circular, the forum found in favor of the appellant. The appeal was allowed, and the impugned order was set aside, providing relief to the appellant from the service tax liability on the services provided as a sub-contractor for erection, commissioning, and installation.