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Service Tax Demand under Erection, Commissioning and Engineer Services

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Service Tax – Demand under erection, commissioning or installation service and consulting engineer service – Purchase order for design, engineering, supply and supervision of erection and commissioning of limestone crushing plant - The appellant contended that transaction is essentially a supply order for the stone crushing plant and it did not provide erection, commissioning or installation service and only provided supervision of erection and commissioning – HELD - Even if it is held that there was a service component in the form of supervision of erection and commissioning of the plant supplied, the said service was manifestly rendered free of cost and thus no service tax liability can arise in this case as the value of the goods supplied cannot be included in the assessable value even as per Notification No. 12/2003-ST as no Cenvat credit has been taken by the appellant in respect of such goods – supervision of erection and commissioning has to be treated as part of sale and such supervision is only incidental to the sale, additionally in the present case there has been no charge for such supervision - the impugned service tax demand is set aside and appeal allowed

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Guest Wednesday, 18 September 2019

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