2005 (5) TMI 646 - AT - Service Tax

Summary

Issues:
1. Classification of services as consulting engineer services or commissioning and installation services for the purpose of service tax liability.

Analysis:
The judgment in question pertains to a revenue appeal against an order where the appellants were providing services related to erection and commissioning. The revenue treated the assessee as a consulting engineer and demanded service tax. The Commissioner, in the impugned order, distinguished between engineering consultancy or advice and commissioning and installation services. He highlighted that commissioning and installation involve executive nature work, while consulting engineer services are of an advisory nature. The Commissioner noted that a separate category for service tax was introduced for commissioning and installation services from 1-7-2003. Based on this distinction, the Commissioner allowed the appeal. However, the revenue contended that the assessee's functions also fall within consultancy services, necessitating the payment of service tax.

Upon hearing both sides and examining the issue, the Judicial Member referred to a previous judgment by the bench in a similar case. The judgment in Yokogawa Blue Star Ltd. v. CCE clarified that the work of erection and commissioning does not fall under consulting engineer services. The Judicial Member emphasized that this precedent was in line with the Board Circular No. 79/9/04/ST, dated 13-5-2004, which is binding on the authorities. Consequently, the Judicial Member found no merit in the revenue's appeal and rejected the same. The decision reaffirmed the distinction between consulting engineer services and commissioning and installation services for the purpose of service tax liability, aligning with the earlier precedent and the relevant Board Circular.