COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VADODARA versus M/S JYOTI LIMITED AND ORS.

Citation: [2022] 7 S.C.R. 534 · Decided: 24-08-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Dismissed

Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 7 S.C.R.
COMMISSIONER OF CUSTOMS AND
CENTRAL EXCISE VADODARA – I
v.
M/S JYOTI LIMITED AND ORS.
(Civil Appeal Nos. 4721 – 4723 of 2008)
AUGUST 24, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Service Tax – Works Contract – Respondent-assessee company
was engaged in manufacture of mechanical, engineering and
electrical goods falling under Chapters 84 and 85 of Central Excise
Tariff Act – In respect of certain buyers, the assessee merely sold
their products – In respect of certain buyers, at their request, the
assessee had undertaken, at the customer's site, certain activities
like construction, civil works including installation, erection and
commissioning of machinery to specific requirements of the customers
– They collected amounts billed variedly as charges towards erection,
testing and calibrations, installation and commissioning,
construction activities etc. – In respect of some other buyers, they
procured some accessories and miscellaneous goods from other
manufacturers or open market and in such cases collected the price
from their customers for supply of the said bought out items –
Whether assessee-company could be said to be rendering of services
of the nature of “advice”, “consultancy” or “technical assistance”
while executing works contract and therefore can be said to be
providing services of consulting engineer and thus liable to pay
service tax – Held: The various services rendered by the assessee
like erection/installation/commissioning of goods at customers’ site
and incidental services of drawing, design etc., cannot be said to
be services rendered by the assessee as a consulting engineer –
The contract can be said to be ‘works contract’ – Therefore,
assessee-company not liable to pay service tax – Central Excise
Tariff Act, 1985 – Chapters 84 and 85.
Dismissing the appeals, the Court
HELD: Having gone through the order passed by the
Commissioner confirming the demand of service tax it appears
that the Commissioner confirmed the demand of service tax
[2022] 7 S.C.R. 534
534
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merely on the ground that services rendered by the assessee
can be said to be services rendered as Consulting Engineer and
therefore liable to pay the service tax. However, considering the
various services rendered by the assessee like erection/
installation/commissioning of goods at customers’ site and
incidentally they may also be providing the services of drawing,
design etc., it cannot be said that the services rendered by the
assessee was as a consulting engineer. The contract can be said
to be ‘works contract’. Hence, the assessee cannot be said to be
rendering the services as a consulting engineer and therefore
liable to pay the service tax. Therefore, once, the assessee at
the relevant time cannot be said to be consulting engineer and/
or rendering services as a consulting engineering the assessee
is not liable to pay the service tax on the ‘works contract’ or the
contract rendering services as consulting engineer for the period
under consideration namely July, 1997 to December, 2000. [Para
4][537-E-H]
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4721-
4723 of 2008.
From the Judgment and Orders dated 31.07.2007, 20.11.2007,
18.12.2007 No.A/3085 to 3087/WZB/AHD/07 & M/1173 to 1175/WZB/
AHD/2007 of the Customs Excise and Service Tax Appellate Tribunal,
West Zone Bench at Ahmedabad in Appeal No.ST/16 to 18/2004.
A. K. Panda, Arijit Prasad, Sr. Advs., Mukesh Kumar Maroria,
Ms. Diksha Rai, Vatsal Joshi, Vishesh Kalra, B. K. Prasad, Advs. for
the Appellant.
Mrs. Nisha Bagchi, Ms. Shambhavi Singh, Ms. Akansha Saini,
Ms. Sheena Taqui, Dhavnit Chopra, Mrs. Bina Gupta, Shiv Vinayak
Gupta, Ms. Charanya Lakshmikumaran, Ms. Mounica Kasturi, Aditya
Bhattacharya, Ms. Apeksha Mehta, Advs. for the Respondents.
The Judgment of the Court was delivered by
M. R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned common
judgment and order passed by the Customs, Excise and Service Tax
Appellate Tribunal, Ahmedabad passed in orders in Appeal Nos. 3085 to
3087 of 2007 by which the learned Tribunal has allowed the said appeals
COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE
VADODARA – I v. M/S JYOTI LTD.
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preferred by the respondent assessee (by a majority) and set aside the
demand of duty and penalty as per the Revisional Authority’s order, the
Revenue has preferred the present appeals.
2. The dispute is with resp

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