Service Tax – Works Contract – Respondent-assessee company was engaged in manufacture of mechanical, engineering and electrical goods falling under Chapters 84 and 85 of Central Excise Tariff Act – In respect of certain buyers, the assessee merely sold their products – In respect of certain buyers, at their request, the assessee had undertaken, at the customer's site, certain activities like construction, civil works including installation, erection and commissioning of machinery to specific requirements of the customers – They collected amounts billed variedly as charges towards erection, testing and calibrations, installation and commissioning, construction activities etc. – In respect of some other buyers, they procured some accessories and miscellaneous goods from other manufacturers or open market and in such cases collected the price from their customers for supply of the said bought out items – Whether assessee-company could be said to be rendering of services of the nature of “advice”, “consultancy” or “technical assistance” while executing works contract and therefore can be said to be providing services of consulting engineer and thus liable to pay service tax – Held: The various services rendered by the assessee like erection/installation/commissioning of goods at customers’ site and incidental services of drawing, design etc., cannot be said to be services rendered by the assessee as a consulting engineer – The contract can be said to be ‘works contract’ – Therefore, assessee-company not liable to pay service tax – Central Excise Tariff Act, 1985 – Chapters 84 and 85.
Dismissing the appeals, the Court
HELD: Having gone through the order passed by the Commissioner confirming the demand of service tax it appears that the Commissioner confirmed the demand of service tax merely on the ground that services rendered by the assessee can be said to be services rendered as Consulting Engineer and therefore liable to pay the service tax. However, considering the various services rendered by the assessee like erection/installation/commissioning of goods at customers’ site and incidentally they may also be providing the services of drawing, design etc., it cannot be said that the services rendered by the assessee was as a consulting engineer. The contract can be said to be ‘works contract’. Hence, the assessee cannot be said to be rendering the services as a consulting engineer and therefore liable to pay the service tax. Therefore, once, the assessee at the relevant time cannot be said to be consulting engineer and/or rendering services as a consulting engineering the assessee is not liable to pay the service tax on the ‘works contract’ or the contract rendering services as consulting engineer for the period under consideration namely July, 1997 to December, 2000. [Para 4][537-E-H]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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