2007 (7) TMI 220 - AT - Service Tax

Works Contracts - activity relating to interior works - work included making false ceilings partitions panelling and boxing etc. assessee is working under the instructions of the architects and do the execution part alone held that appellant were carrying activities more akin to civil work in terms of definition of the term Commercial or Industrial Construction Services assessee plea was rejected and they were brought under the definition of Interior Decorators stay partly granted

Summary

Issues:
Classification of services under Service Tax for works contracts involving interior works and false ceilings, partitions, panelling, etc.
Applicability of the definition of 'Interior Decorators' under Section 65(59) of the Finance Act, 1994.
Comparison with a similar case regarding pre-deposit amounts and classification.

Analysis:
The judgment revolves around the classification of services for works contracts related to interior works, false ceilings, partitions, and panelling, among others, for the purpose of Service Tax. The appellant contended that they were not involved in planning, designing, or advising customers, as they worked solely under the architects' instructions for execution. However, detailed investigations by the department categorized their activity under the definition of 'Interior Decorators' as per Section 65(59) of the Finance Act, 1994. The appellants disputed this classification, asserting coverage under 'Commercial or Industrial Construction Services,' which was rejected in the impugned order.

In a similar matter involving M/s. Spandrel v. CCE, Hyderabad, the appellants were directed to pre-deposit Rs. 10 lakhs against a demand of Rs. 1.09 crore. The appellant in the present case sought a similar treatment based on identical issues. The learned JDR argued for better terms despite the similarity of the issue. Upon examination of the previous Stay Order, it was noted that the appellants therein were engaged in activities more aligned with civil work falling under 'Commercial or Industrial Construction Services.' Despite this, their plea was dismissed, and they were classified as 'Interior Decorators.' Given the similarities in facts, the appellants in the current case were directed to pre-deposit Rs. 10,00,000 within three months, with non-compliance leading to appeal dismissal. Both appeals, involving amounts exceeding Rs. 2 crore, were scheduled for a final hearing on 10th December 2007, as requested by the learned JDR for expedited proceedings.