2007 (10) TMI 138 - AT - Service Tax

Pre-design drawing technical assistance can t be made taxable under consulting engineer as same has been provided by electrical contractor not by qualified engineer - services of erection came taxable w.e.f. 10-9-04 & electrical wiring services w.e.f. 14-5-05 no liability arise for disputed period

Summary

Issues:
1. Liability to pay service tax under the category of consulting engineer and commissioning installation and erection services.
2. Qualification of the appellant as a consulting engineer.
3. Taxability of services related to commissioning, installation, and erection of electrical systems.
4. Applicability of service tax on electrical wiring services before specific dates.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore was filed against an Order-in-appeal passed by the Commissioner of Central Excise & Appeals, Cochin. The appellant, an electrical contractor, was accused of not paying service tax under the categories of consulting engineer and commissioning installation and erection services. The Original Authority confirmed the demand for services and imposed penalties, which were later set aside by the Commissioner (Appeals). The appellant contested the Commissioner (Appeals) order on various grounds, leading to the appeal before the Tribunal.

During the hearing, the appellant's advocate argued that the appellant should not be liable to pay service tax for certain services during the relevant period. The departmental representative supported the impugned order. The Tribunal carefully analyzed the issue and found that the demand was related to the period from 1-7-2003 to 31-3-2004. It was alleged that the appellant provided services as a consulting engineer and also in commissioning, installation, and erection. However, the Tribunal noted that the appellant, being an electrical contractor, was not a qualified engineer providing consulting services. The Tribunal also clarified that the services related to erection of an 11 KV Transformer, which only became taxable after 10-9-2004. The Tribunal referred to relevant circulars and the change in the definition of taxable services to support its decision.

Ultimately, the Tribunal concluded that the appellant was not a qualified engineer, and the services provided were not taxable during the period in question. Therefore, the demand confirmed was deemed unsustainable. The appeal was allowed, providing the appellant with consequential relief. The judgment was pronounced in open court on 12-11-2007.