2014 (3) TMI 267 - AT - Service Tax

Demand of service tax - Consulting Engineer s Service - Operation and maintenance of windmills - Held that - What the appellant has performed is operation and maintenance of windmills and not rendering any advice, consultancy or technical assistance in any field of engineering, which is the criterion for classifying the service under the category of Consulting Engineer s Service . Such executory services does not come under the purview of Consulting Engineer s Service - Decided in favour of assessee.

Summary

Issues:
Classification of services under 'Consulting Engineer's Service' for operation and maintenance of windmills.

Analysis:
The appeal challenged the Order-in-Original passed by the Commissioner of Central Excise, Pune-II, demanding Service Tax from the appellant for services rendered to M/s. Suzlon Energy Ltd. The appellant, M/s. Suzlon Windfarm Services Ltd., provided operation and maintenance services for windmills sold by M/s. Suzlon Energy Ltd. The department categorized these services as 'Consulting Engineer's Service' and issued a show cause notice for Service Tax demand. The appellant contended that their services were executory in nature and did not involve advice, consultancy, or technical assistance, thus not falling under 'Consulting Engineer's Service'. The appellant relied on precedents like Rolls Royce Industrial Power (I) Ltd. and Basti Sugar Mills Co. Ltd. to support their argument.

The appellant's services included round-the-clock security, continuous operation and maintenance, parts replacement, data collection, and liaison with government agencies. The Tribunal noted that the appellant's activities were operational in nature and did not involve advisory services, aligning with the decision in Rolls Royce Industrial Power (I) Ltd. The Tribunal emphasized that the execution of activities requiring engineering skills does not automatically classify a service as 'Consulting Engineer's Service'. The Tribunal distinguished the case from M.N. Dastur & Company Ltd., where advice was tendered, unlike in the present scenario.

In conclusion, the Tribunal found the impugned order unsustainable in law and set it aside, allowing the appeal with any consequential relief as per the law. The judgment highlighted the distinction between operational services and advisory services in determining the classification under 'Consulting Engineer's Service'.