Commissioner of Customs and Central Excise Vadodara-I vs. Jyoti Limited and Ors. - (Supreme Court) (24 Aug 2022)

When assessee is not rendering services as consulting engineer, he is not liable to pay the service tax

MANU/SC/1032/2022

Service Tax

The Revenue has preferred the present appeals dissatisfied with the impugned common judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal, by which the learned Tribunal has allowed the said appeals preferred by the respondent assessee and set aside the demand of duty and penalty as per the Revisional Authority’s order.

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. No error has been committed by the learned Tribunal in setting aside the order passed by the Commissioner and restoring the Order¬-in-¬Original passed by the Deputy Commissioner dropping the show cause notice and demand of service tax and penalty considering the nature of services rendered by the assessee. Present Court is in complete agreement with the view taken by the Tribunal. Appeals dismissed.

Tags : DEMAND PENALTY DELETION