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ST - Leveling of area and preparing of courtyards and water fall around lake & maintenance of plants cannot be considered as advisory or consultancy or technical assistance so as to be charged to ST under category of Interior Decorator: CESTAT

By TIOL News Service

MUMBAI, APR 21, 2014: THE appellant undertook the activity of plantation of grass and trees, shrubs in factory area and also the work of maintenance of lawns etc. It is the allegation of the CE jurisdictional authorities at Pune 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 such service is covered under the definition of "Interior decorator" as mentioned in clause 59 of Section 65 of the Finance Act, 1994.

As the Commissioner (Appeals) upheld the Service Tax demand of Rs.10,71,142/-, interest and penalty, the appellant is before the CESTAT.

It is submitted that the appellant had undertaken the activity of plantation and maintenance of grass and plant which cannot be considered as any advice, consultancy for beautification but 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. and hence the ST demand under the category of ‘Interior Decorator'is not sustainable.

The Revenue representative reiterated the finding of the lower authorities and submitted that as per the definition of ‘Interior decorator' landscaping is covered and since the applicant entered into a composite contract for landscaping which includes beautification by way of plantation of trees and ornamental plants, the demand is rightly made.

The Bench extracted the definition of ‘interior decorator' as given in clause of Section 65 of the Finance Act, 1994 and observed -

"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."

Holding that there is merit in the contention of the appellant, the order of the lower authorities was set aside and the appeal was allowed.

(See 2014-TIOL-603-CESTAT-MUM)


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