Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Gujarat Goldcoin Ceramics Ltd. on 13 April, 2005
Equivalent citations: 2005(187)ELT193(TRI-MUMBAI), 2006[3]S.T.R.670
ORDER
Jyoti Balasundaram, Vice-President
1. The brief facts of the case are that M/s. Gujarat Goldcoin Ceramics Ltd. (hereinafter referred to as the service receiver) manufactures ceramic tiles. They entered into contract dated 2-10-1997 with an Italian company for technical assistance/erection/commissioning of the plant and machinery. They received technical assistance for erection and for commissioning. The Supdt. of Central Excise issued a show cause notice dated 23-8-2001 calling upon the service receiver to pay service tax of Rs. 4,86,514/-. The notice also proposed imposition of penalty. The demand of service tax was upheld by the Dy. Commissioner who also imposed penalty of equal amount of duty under Section 76 and a penalty of Rs. 1,000/- under Section 77 of the Finance Act, 1994. In appeal, The Commissioner (Appeals) upheld the demand of service tax; however, he reduced the penalty under Section 76 to Rs. 50,000/-. The service receiver is in appeal against upholding the demand of service tax and penalties while the Revenue is in appeal against the reduction of penalty.
2. I have heard both sides. I find that the demand of service tax against the service receiver cannot be sustained in view of the fact that, in the case of M/s. DGP Windsor India Ltd. v. CCE, Mumbai-III [Order No. A/593/WZB/2004/C-II, dated 19-7-2004], the Tribunal had held that the charges for erection, installation and commissioning were not covered under the category of "Consulting Engineering Services" leviable for the period in dispute which was prior to July, 2003. In the present case, the period covered is 1-10-1998 to 13-9-2001. The Tribunal relied upon the Central Board of Excise & Customs Circular No. 79/9/2004-S.T., dated 30-5-2004 for coming to its conclusion. The Tribunal also held that commissioning or installation services are not chargeable under "Consulting Engineering Services" (which is where they are held to be covered in the present order.) but they will be separately taxable under relevant entry introduced subsequently.
3. Yet an another reason in the present case for holding that the demand of service tax cannot be sustained, is that the Indian company is the service receiver and it is only with effect from 16-8-2000 that a service receiver was made payable to service tax. Therefore reliance placed by the authorities below on Clause 23 of the Agreement between the Indian Company and the Italian Company for holding that the liability to pay service tax vests with the Indian Company is also not acceptable. For both these reasons, the demand of service tax and penalties are not sustainable and accordingly, I set aside the same and allow the appeal of the service receiver. On the same basis, the appeal of the Revenue for enhancement of the penalty is rejected.
(Dictated in Court)