28 April, 2014

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Works Contract Service v. Technical Assistance :- Service Tax

In case of MRS SHOBHA P BHOPATKAR Versus COMMISSIONER OF CENTRAL EXCISE, PUNE-III 2014 (4) TMI 956 - CESTAT MUMBAI it has been that :-
“The work order is for leveling of area and preparing of the courtyards and for plantation of trees/shrub and laying pebbles and water fall around lake. The other contract is in respect of maintenance of lawn, providing water supply arrangement and for maintenance of trees and plant including trimming, removing grass shrubs etc. These work order are for execution of work and nowhere these can be considered as advisory or consultancy or technical assistance.”

Text of Judgement
No. - Appeal No.ST/297/06 - Mum

Dated - February 28, 2014

S S Kang and P K Jain, JJ.
For the Appellant : Shri Sagar Shah, CA
For the Respondent : Shri D D Joshi, Supdt. (AR)
JUDGEMENT
Per: S S Kang:
Heard both sides.
2. The appellant filed this appeal against the impugned order whereby the Commissioner (Appeals) upheld that demand of Rs. 10,71,142/-, interest and penalty on the ground that the appellant provided interior decorator service. The contention of the appellant is that appellant undertaken the activity of actual plantation of grass and trees, shrubs in factory area and also undertaken the work of maintenance of lawns etc. The demand is confirmed on the ground that the appellants are directly or indirectly in the business of providing by way of advice, consultancy and technical assistance in respect of beautification of space and it is covered under the definition of interior decorator as clause 59 of Section 65 of the Finance Act, 1994.
3. The contention is that the applicant had undertaken the activity of plantation and maintenance of grass and plant which cannot be considered as any advice consultancy for beautification, rather it is execution of work. The appellant relied on work orders to show that activity undertaken by the appellant is leveling of the plots and plantation of trees etc. Hence the demand is not sustainable.
4. Revenue relied on the finding of the lower authorities and submitted that as per the definition of interior decorator as provided under the Finance Act, 1994, landscaping is covered. The applicant entered into a composite contract for landscaping which includes beautification by way of plantation of trees and ornament plant. In view of this, demand is rightly made.
5. In the present case demand has been made under the interior decorator service. For ready reference Clause 59 of Section 65 of the Finance Act, 1994 is reproduced below:
            "interior decorator" means any person engaged, whether directly or indirectly, in the business of providing by way of advice, consultancy, technical assistance or in any other manner, services related to planning, design or beautification of spaces, whether man-made or otherwise and includes a landscape designer."
6. We have gone through the terms and conditions of the work orders, which are reproduced in the Order in Appeal. The work order is for leveling of area and preparing of the courtyards and for plantation of trees/shrub and laying pebbles and water fall around lake. The other contract is in respect of maintenance of lawn, providing water supply arrangement and for maintenance of trees and plant including trimming, removing grass shrubs etc. These work order are for execution of work and nowhere these can be considered as advisory or consultancy or technical assistance.
7. In view of the above, we find the merit in the contention of the appellant. The impugned order is set aside and appeal is allowed.
(Dictated in Court)








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