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2023 (6) TMI 1158 - CESTAT KOLKATAConsulting Engineering Service or not - Activity of supply of basic equipments as well as supervision and erection and commissioning of the manufacturing lines - valuation of such service - HELD THAT:- The Appellant raised consolidated bill to the client JUD, which include supply of materials and providing technical assistance for setting up the cement plant. Out of gross receipt of Rs.65,76,56,249/-, the Appellant has supplied machinery and equipments valued at Rs.13,68,01,000/-from their own manufacturing unit, which include an amount of Rs.2,42,91,584/- paid towards Central Excise duty. The Appellant is not a consulting engineer firm. They are a manufacturing firm and whenever physical execution of erection and commissioning is sought along with supply of their own manufactured goods, they assist the buyer in procurement of bought out items. In the present case, JUD themselves undertook the erection and commissioning activity. Apart from the Appellant they have engaged various other service providers also to assist them in the erection and commissioning activities. Hence, the allegation of the department that the Appellant has rendered 'Consulting Engineer' service is not supported by any evidence - the Appellant has appropriately paid service tax on the services rendered towards supervision of erection and commissioning of the plant. The value of bought out items sold to JUD on a profit cannot be considered as ‘Consulting Engineer service’ for the purpose of demanding service tax. A composite contract cannot be bifurcated to artificially arrive at the service value - the demand in the impugned order is not sustainable - Since the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise. Appeal allowed.
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