2004 (5) TMI 6 - AT - Service Tax

Service Tax Consulting Engineer Commissioning and installation services are not covered under consulting engineer services Stay/Dispensation of pre-deposit of service tax

Summary

Issues: Pre-deposit of Service Tax and penalty under Sections 76 and 78 for the activity of erection and installation of machinery; applicability of Circular No. 79/9/2004-S.T. issued by the Board of Central Excise & Customs clarifying the taxability of commissioning and installation services.

In the judgment delivered by the Appellate Tribunal CESTAT (BANGALORE), the appellant was required to pre-deposit a substantial amount of Service Tax and penalty for carrying out erection and installation of machinery. The department had raised a demand under the category of 'Consulting Engineer Services'. The appellant's Advocate referenced Circular No. 79/9/2004-S.T., which clarified that erection, installation, and commissioning activities are not covered under Consulting Engineer Services and should be separately taxable under relevant entries. The period in question was from 7-7-1997 to 31-3-2001, during which no specific entry existed for the services provided by the appellant, with the relevant entry only being introduced on 1-7-2003.

Upon hearing the arguments, the Tribunal acknowledged the applicability of the Board's Circular to the case, as the period in question preceded the introduction of the specific heading for Commissioning and Installation Services. Consequently, the Tribunal allowed the stay application, granting a waiver of the pre-deposit and stay of recovery. Additionally, the request for an early hearing was accepted due to the significant amount involved. The appeal was scheduled for final hearing on 8th September, 2004, indicating a favorable outcome for the appellant based on the interpretation of the relevant Circular and the absence of a specific tax entry during the period in question.