2007 (11) TMI 136 - AT - Service Tax

Applied for refund on the ground that the services of erection, commissioning or installation were not covered under consulting engineering services and became taxable only w.e.f. 01.07.2003 - issue involved is covered by the decision of the Tribunal in an earlier case and decided against the Revenue - order of the Appellate Commissioner upholding the order of the adjudicating authority of rejection of refund is contrary to law so assessee s appeal allowed for refund

Summary

Issues:
Challenge to the order of the Commissioner (Appeals) upholding the rejection of a refund claim of Rs.5,05,902 by the appellant based on the taxability of erection, commissioning, or installation services.

Analysis:
The appellant contested the rejection of their refund claim amounting to Rs.5,05,902, asserting that services of erection, commissioning, or installation only became taxable starting from July 1, 2003. They relied on a circular by the CBEC dated May 13, 2004, arguing that installation and commissioning services did not fall under "consulting engineering services," citing previous Tribunal decisions supporting their stance.

The department's representative supported the Commissioner (Appeals)'s decision, claiming that the circular from May 13, 2004, did not exempt the services from service tax under the category of "consulting engineer."

The crucial issue at hand was addressed by the Tribunal in prior cases, notably in Yokogawa Blue Star Ltd. vs. CCE, Bangalore-II, where it was established that commissioning or installation services did not fall under the category of "consulting engineer services." This interpretation was further upheld in subsequent cases such as CCE, Belgaum vs. Karnataka Conveyors and Systems (P) Ltd., Sanghi Oxygen (Bombay) P. Ltd., vs. CCE, Mumbai, and CCE, Rajkot vs. Gujarat Gold Coin Ceramics Ltd. The Tribunal found that the impugned order of the Appellate Commissioner, affirming the adjudicating authority's decision, contradicted the precedent set by these judgments. Consequently, the Tribunal set aside the lower authorities' orders and accepted the refund claim, granting consequential relief to the appellant, thereby allowing the appeal.

The decision was dictated and pronounced in open court by the Vice-President, Justice R.K. Abichandani, thereby resolving the dispute in favor of the appellant based on the established legal principles and precedents cited during the proceedings.