2012 (9) TMI 375 - AT - Service Tax

Demand - Interior Decorators Held that - Assessee engaged in making wooden furniture as per design and drawing supplied by their customer and also undertook civil work, painting work, plumbing work and electrical work - Their activity will not come under the category of interior decorator as it is apparent on record that the assessees in question are engaged in the activity of execution of work of the design and drawing supplied to them by their clients for civil work, sanitation work plumbing work, electrical work and wooden furniture. Matter remanded back for re-adjudication.

Summary

Issues:
Whether the appellants, engaged in activities as 'Interior Decorators,' are liable to pay Service tax as per the Finance Act, 1994.

Analysis:
The appeals were filed against orders confirming the demand of Service tax, interest, and penalties for activities under the category of 'Interior Decorators.' The Revenue challenged the cum-Service tax benefit for one of the appellants. The central issue was whether the appellants fell under the definition of 'Interior Decorator' as per Section 65(59) of the Finance Act, 1994. The appellants argued that they provided services like making wooden furniture, civil work, painting, plumbing, and electrical work based on designs from clients, not falling under the 'Interior Decorator' category. They cited a Tribunal decision to support their stance.

The Revenue contended that the appellants represented themselves as 'Interior Decorators' and were contractually assigned such work, making them liable for Service tax. The Tribunal analyzed the definition of 'Interior Decorator' under the Finance Act, 1994, emphasizing services related to planning, design, or beautification of spaces. Upon examining the work contracts and bill details, it was found that the appellants mainly executed work like sanitation, plumbing, civil work, and making wooden furniture, with one item requiring further clarification. Referring to the Tribunal's previous decision, it was noted that the appellants did not provide advisory, consultancy, or planning services, thus not falling under the 'Interior Decorator' category.

The Tribunal remanded the matter to the adjudicating authority to verify the nature of activities undertaken by the appellants. If the work was primarily execution-based, it would not qualify as 'Interior Decorator' services. However, if any part involved advisory or planning services, Service tax would be applicable. No penalties were to be levied until the issue was clarified, and the appellants were granted the benefit of cum-Service tax. The Revenue's appeal was dismissed, and the appellants' appeals were remanded for further examination.

In conclusion, the Tribunal's decision clarified the scope of 'Interior Decorator' services under the Finance Act, 1994, emphasizing the need for services related to planning, design, or beautification of spaces to fall under this category. The matter was remanded for detailed verification, ensuring the correct application of Service tax based on the nature of activities undertaken by the appellants.