2013 (6) TMI 709 - AT - Service Tax

Summary

Issues involved:
The issue involved in this case is whether certain services provided by the appellant to the Airport Authority are liable to excise duty under the Central Excise Act, 1944.

Summary of Judgment:

1. Documentation:
The appellant argued that documentation services provided do not relate to goods manufactured in India, and if taxable, should be tested under the Finance Act, 1994. The documentation was not found to be taxable under the Central Excise Act.

2. Installation and Check Out:
Although proposed to be taxed, installation and check out services did not survive in adjudication and were not subject to excise duty.

3. Training to Customer Personnel:
The training provided to customer personnel was deemed a pure service contract and not subject to taxation under the Central Excise Act.

4. Amortization of Cost:
The amortization of cost of tools and testing equipment was clarified to not relate to the goods manufactured by the appellant, and therefore, not subject to excise duty.

5. System Integration and Evaluation:
This aspect was dropped in adjudication, and it was emphasized that only documentation, training to customers, and amortization of cost were contentious issues for the Revenue.

6. Conclusion:
The appellant's case demonstrated that divisible contracts were executed, clearly separating supply from services provided. It was established that the major supply of goods was imported, with only minor parts manufactured by the appellant being subject to duty. As per the law, taxable services are governed by the Finance Act, 1994, and cannot be taxed under the Central Excise Act to add to the assessable value. Therefore, the appellant's appeal was successful, and no excise duty liability was found on the services provided.