Service tax on metal crash barrier erection failed for pre-2004 work under commissioning and installation service.

Erecting metal crash barriers was examined under the scope of erection, commissioning or installation service, which applied to services by an agency in relation to plant, machinery or equipment. The activity had been treated by the original authority as erection of equipment, but the levy of erection service entered the service tax net only from 10.09.2004. Because the work was carried out during 23.10.2003 to 23.01.2004, the demand could not be sustained for that earlier period and no service tax liability arose for the disputed span.

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Issues: Whether the respondent's activity of erecting metal crash barriers during the period 23.10.2003 to 23.01.2004 was taxable as erection, commissioning or installation service under the Finance Act.

Analysis: The relevant statutory definitions covered commissioning or installation services provided by an agency in relation to plant, machinery or equipment, and the taxable service was service provided by such an agency in relation to commissioning or installation. The activity in question was treated by the original authority as erection of equipment. However, the levy of erection service was brought into the service tax net only from 10.09.2004. Since the services were rendered before that date, the demand could not be sustained for the earlier period.

Conclusion: The respondent was not liable to service tax for the period in dispute under erection, commissioning or installation service.

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