Installation linked to sale of solar systems can attract service tax, while taxable value may still require fresh re-examination.

Installation of solar water heater systems sold at site was treated as part of a taxable erection, installation and commissioning service, even though no separate installation charge appeared in the invoices, because the record showed that installation was actually undertaken in connection with the sale. At the same time, the taxable value of the service component required fresh examination since the appellants had furnished material that had not been considered by the adjudicating authority. The matter was therefore remanded for recomputation of the service component on the basis of the relevant records.

---

---

Issues: (i) Whether the activity of installation of solar water heater systems sold at site without separately charging installation amounts was liable to service tax under the category of erection, installation and commissioning service. (ii) Whether the matter required remand for re-examination of the service component on the basis of the data furnished by the appellants.

Issue (i): Whether the activity of installation of solar water heater systems sold at site without separately charging installation amounts was liable to service tax under the category of erection, installation and commissioning service.

Analysis: The activity of installation was held to form part of the taxable service. The fact that no separate installation charge was shown in the invoices did not take the activity outside the service category where the record showed that installation activity was in fact undertaken in connection with the sale of the solar systems.

Conclusion: The activity fell within erection, installation and commissioning service and was liable to service tax.

Issue (ii): Whether the matter required remand for re-examination of the service component on the basis of the data furnished by the appellants.

Analysis: The appellants had furnished material for computation of the service component, but that material had not been considered by the adjudicating authority. Since the quantification of the taxable service portion required examination of the records and documents, the matter called for fresh consideration at the original stage.

Conclusion: The matter was remanded to the original adjudicating authority for fresh examination and recomputation of the service component.

Final Conclusion: Taxability of the installation activity was upheld, but the assessment of the service component was sent back for reconsideration, so the appeals succeeded only to the extent of remand.

Ratio Decidendi: Where installation activity is undertaken in connection with sale of goods and forms part of the transaction, it can be taxed as an independent service even if no separate installation charge is raised, while the taxable value must still be re-examined on the basis of the relevant records.

---