2008 (12) TMI 79 - AT - Service Tax

Demand on services of Interior Decorators & services of Management Consultants respondent manufacturer of Iron and Steel Furniture - giving advice in some isolated case to rearrange the furniture in the office premises of their customer to save the space not make the appellant as Interior Decorator further, merely advising their client as to in which company or security, he should make investment is not taxable as services of Management Consultants

Summary

Issues:
1. Whether the respondent is liable to pay service tax for providing Interior Decorator services.
2. Whether the respondent can be classified as a Management Consultant for providing investment advice.

Analysis:

Issue 1: Interior Decorator Services
The Tribunal examined whether the respondent, a manufacturing unit of Iron and Steel Furniture, was liable to pay service tax for providing Interior Decorator services. The Commissioner (Appeals) set aside the demand for tax, stating that the appellant was not engaged in the business of interior decoration as defined in Section 65(59) of the Finance Act, 1994. The Commissioner emphasized that the appellant's occasional advice on rearranging furniture did not make them interior decorators, as they were primarily known as manufacturers and not engaged in regular interior decoration activities. The Tribunal concurred with this reasoning, concluding that the appellant did not fall under the definition of an Interior Decorator, and hence, the service provided was not taxable.

Issue 2: Management Consultant Services
Regarding the classification of the respondent as a Management Consultant for providing investment advice, the Commissioner (Appeals) analyzed the definition of a management consultant under Section 65(37) of the Finance Act, 1994. The Commissioner highlighted that management involves various activities like planning, organizing, staffing, directing, and controlling an organization systematically. The Commissioner noted that the appellant's advice on financial investments did not constitute management consultancy as they did not engage in conceptualizing, developing, or modifying organizational systems. The Tribunal agreed with the Commissioner's assessment, stating that the appellant's investment advice did not align with the definition of a management consultant. The Tribunal emphasized that the appellant's single instance of advising on financial investments did not warrant classification as a management consultant, as they were not regularly engaged in such consultancy services.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming that the respondent was not liable to pay service tax for either Interior Decorator or Management Consultant services based on the detailed analysis of the definitions and activities involved in each service category.