2018 (5) TMI 485 - AT - Service Tax

Classification of services - appellants were engaged in making false ceiling, partitions, panelling, boxing, applying wall papers, carpeting etc. - Department took the view that these activities would fall under the category of Interior Decorator Service and not under the category of Commercial or Industrial Construction Service (CICS) - whether the service would be classifiable under Interior Decorator Service or under CICS? - Held that - Interior Decorator Service involves provision of advice, consulting technical assistance or services provided by way of intelligence or skill. There is no supply of material envisaged in the provision of services under Interior Decorator Service. From the sample copies of invoices submitted along with the appeal, it is found that the activities involving making mirror panelling, false ceiling, lunch room tables, sofa, chairs, laminated panelling etc. with the materials to be supplied by the appellants themselves - It is also interesting to note that in all these invoices, the work has to be completed as per design and drawing and specifications as provided by M/s.Gypsum India Ltd. Discernably, the appellants are then no where involved even in the design and drawing of the work that has been entrusted to them. The appellants cannot then be slotted into the category of Interior Decorator Service. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of services under 'Commercial or Industrial Construction Service' (CICS) or 'Interior Decorator Service'; imposition of penalty unjustified.

Analysis:
The case involved a dispute regarding the classification of services provided by the appellants as either 'Commercial or Industrial Construction Service' (CICS) or 'Interior Decorator Service'. The department argued that the activities of false ceiling, partitions, panelling, etc., fell under Interior Decorator Service, leading to a show cause notice for service tax and penalties. The adjudicating authority upheld this classification, which was subsequently confirmed by the Commissioner (Appeals), resulting in the appeal before the tribunal.

During the hearing, the appellant's advocate presented invoices to demonstrate that the services provided were related to completion and finishing services falling under CICS, not Interior Decorator Service. The advocate also argued against the imposition of penalties, emphasizing the interpretation of whether the services fell under CICS or Interior Decorator Service. The advocate cited relevant case laws to support their contention.

After hearing both sides and examining the facts, the tribunal analyzed the definitions of the competing service categories. It noted that Interior Decorator Service involves providing advice, consulting, or technical assistance without the supply of material. However, the invoices submitted by the appellants showed activities involving the supply of materials like mirror panelling, false ceiling, etc., as per design and specifications provided by another entity. This led the tribunal to conclude that the appellants did not fit into the category of Interior Decorator Service.

The tribunal also referenced a previous decision involving similar activities, where it was held that such services did not fall under Interior Decorator Service. Based on the facts, definitions, and judicial pronouncements, the tribunal found merit in the appeal. Consequently, the impugned order was set aside, and the appeal was allowed, ruling in favor of the appellants.