Customs, Excise and Gold Tribunal - Bangalore
Yokogawa Blue Star Ltd. vs Cce on 31 January, 2005
Equivalent citations: 2005(186)ELT601(TRI-BANG), 2006[3]S.T.R.580
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Order in Review No. 01/2003-CE dated 16.12.2003 passed by the Commissioner of Central Excise, Bangalore, rejecting the assessee's review against OIO No. 01/2003 dated 27.01.2003 passed by the Deputy Commissioner of Central Excise, in terms of Section 84 of the Finance Act, confirming Service Tax, on the erection and commissioning activity. The assessee had contended that the activity of erection and commissioning was done as part of the transaction of post manufacturing activity, but not independently and it cannot be treated as a service under the purview of Service Tax. The Service Tax on services rendered by a Consulting Engineer was introduced vide Section 88 of the Finance Act 1997 and was made applicable from 07.07.1997 as per Notification No. 23/97 dated 02.07.1997. The Board had issued a Circular No. 49/11/2002-ST dated 18.02.2002 whereby it was clarified that the work of erection and commissioning is in the nature of Service provided by a Consulting Engineer and is taxable under Service Tax. However, in the year 2003, Service Tax was imposed on commissioning and installation services effective from 01.07.2003. In terms of Circular No. 59/8/03 dated 20th June, 2003 issued from File No. B3/7/2003 TRU, it was clarified that charges for erection of plant would not be covered under commissioning and installation services. In view of conflicting views and several representations received in the Board for clarification, the Board, therefore, by Circular No. 79/9/2004-ST dated 13.05.2004, clarified that charges for erection, installation and commissioning are not covered under the category of Consulting Engineer Services. The Circular was issued by the Board in consultation with the Ministry of Law and Justice. It further clarified that commissioning or installation services will be separately taxable under relevant entry and are not chargeable under Consulting Engineer services. Therefore, they modified Circular No. 49/11/2002-ST dated 18.12.2002. Therefore, the learned Advocate submitted that this Board's Circular issued on 13.05.2004 is binding on the department and erection and commissioning charges cannot be brought within the net of Service Tax and the order is not proper in law. He submitted that the Board's Circular is binding as held by the Apex Court in the case of Dhiren Chemicals - 2002 (139) ELT 3(SC).
2. The learned SDR relied on the Tribunal's ruling rendered prior to the Board's Circular referred to in the case of Transweigh (India) Ltd. v. CCE, Mumbai - 2004 (170) ELT 527 (Tri.-Mumbai).
3. We have carefully considered the submissions and we find that the Tribunal's ruling cited by the SDR in the case of Transweigh (India) Ltd. is prior to the issue of the Board's Circular and the same does not hold the field now in view of the Board having clarified that the commissioning or installation services would not be covered under Service Tax in the category of Consulting Engineer Services effective from 07.07.1997. In view of the Board's Circular which is binding on the authorities, the impugned order is not sustainable and the same is set aside by allowing the appeal with consequential relief, if any.