2003 (11) TMI 3 - AT - Service Tax

Service Tax Consulting Engineers Drawing and Designing elements of works contract are not liable to service tax

Summary

Issues:
Determining liability for service tax on engineering projects executed on works contract terms.

Analysis:
The appellant executed engineering projects on works contract terms, raising the issue of liability for service tax in relation to such projects. The impugned order held that the design element of the works contract would be liable to service tax. The appellant argued that a work contract cannot be vivisected, citing a Tribunal decision in a similar case. The SDR highlighted a CBEC circular clarifying that designing and drawing work in construction activities is a service provided by a consulting engineer and is taxable. The Tribunal examined the submissions and records, finding the facts similar to a previous case and following the decision of the Supreme Court, allowed the appeal based on the precedent set in the Daelim Industrial Co. Ltd. case. The appellant was granted consequential relief in light of this decision.