2014 (4) TMI 956 - AT - Service Tax

Interior decorator service - Held that - The work order is for leveling of area and preparing of the courtyards and for plantation of trees/shrub and laying pebbles and water fall around lake. The other contract is in respect of maintenance of lawn, providing water supply arrangement and for maintenance of trees and plant including trimming, removing grass shrubs etc. These work order are for execution of work and nowhere these can be considered as advisory or consultancy or technical assistance - Decided in favour of assessee.

Summary

Issues:
- Appeal against demand of Rs.10,71,142, interest, and penalty for providing interior decorator service.
- Interpretation of the definition of "interior decorator" under Clause 59 of Section 65 of the Finance Act, 1994.
- Analysis of the work undertaken by the appellant to determine if it falls under interior decorator service.

Analysis:
The appellant appealed against an order upholding a demand, interest, and penalty for providing interior decorator service. The appellant contended that their activity involved actual plantation of grass, trees, and shrubs, along with maintenance work, rather than advisory or consultancy services. The demand was based on the premise that the appellant's activities fell under the definition of interior decorator as per Clause 59 of Section 65 of the Finance Act, 1994. The appellant argued that their work orders demonstrated activities like leveling of plots, plantation of trees, and maintenance of lawns, which were execution-based and not advisory in nature.

The Revenue, however, supported the demand, citing that landscaping, including beautification through plantation of trees and ornamental plants, was covered under the definition of interior decorator. The Revenue highlighted that the appellant had entered into composite contracts for landscaping, which included beautification aspects. The key contention revolved around whether the appellant's activities constituted advisory, consultancy, or technical assistance as per the legal definition of interior decorator.

Upon reviewing the terms and conditions of the work orders, the Tribunal found that the activities undertaken by the appellant, such as leveling areas, preparing courtyards, plantation of trees/shrubs, and maintenance of lawns, did not align with advisory, consultancy, or technical assistance services. The Tribunal concluded that the work orders focused on execution rather than providing advice or consultancy. Therefore, the Tribunal set aside the impugned order, ruling in favor of the appellant and allowing the appeal.

In essence, the Tribunal's decision hinged on the distinction between execution-based activities, like plantation and maintenance work undertaken by the appellant, and advisory or consultancy services as defined under the interior decorator service. By analyzing the nature of the appellant's work orders and aligning them with the legal definition, the Tribunal determined that the demand was not sustainable under the interior decorator service category, leading to the appeal being allowed.