2014 (3) TMI 542 - AT - Service Tax

Tribunal: No Service Tax for Interior Decorating Services Provider

The Tribunal dismissed the Revenue's appeal against the Commissioner's order demanding service tax from the respondents for interior decorating services. ... Interior decorator service - scope of 'interior decorator' definition - advice, consultancy or technical assistance relating to planning, design or beautification - execution of civil, electrical and furnishing works not constituting interior decorator service - designs and drawings supplied by service recipient - impact on service classificationInterior decorator service - scope of 'interior decorator' definition - advice, consultancy or technical assistance relating to planning, design or beautification - execution of civil, electrical and furnishing works not constituting interior decorator service - designs and drawings supplied by service recipient - impact on service classification - Demand for service tax on the respondents on the ground that they rendered 'interior decorator' service was not sustainable - HELD THAT: - The adjudicating authority dropped the demand after considering the respondents' replies and work orders (paras 3-5). The Court examined the statutory definition of 'interior decorator' which covers persons providing, by way of advice, consultancy or technical assistance, services related to planning, design or beautification of spaces (para 6). In the present case the work orders produced relate to renovation/modification and civil, electrical and allied works, and the drawings and designs were supplied by the service recipients; the respondents executed the works as per those drawings (para 5). There is no evidence that the respondents furnished advice, consultancy or technical assistance in planning or design; rather they carried out execution of civil/electrical/furnishing works. The Tribunal's earlier decision in Space Decorators vs. Commissioner of C.E. Pune-III was applied to hold that execution of civil, sanitation, plumbing, electrical work and wooden furniture does not fall within the scope of interior decorator service. On these grounds the impugned demand based on classification as interior decorator service was held to be without merit (para 7). [Paras 5, 6, 7]The appeal is dismissed and the demand for service tax on the ground that the respondents provided interior decorator service is rejected.Final Conclusion: The Tribunal affirmed the adjudicating authority's order dropping the demand: the activities undertaken by the respondents were execution of civil and allied works as per designs supplied by the recipients and did not amount to providing 'interior decorator' services involving advice, consultancy or technical assistance. Issues:1. Appeal against the impugned order passed by the Commissioner (Adjudication) Central Excise, Mumbai regarding service tax on interior decorating services.2. Interpretation of the definition of 'Interior Decorator' under Section 65(59) of the Finance Act, 1994.3. Determination of whether the respondents provided services falling under the category of interior decorator.Analysis:The appeal was filed by the Revenue against the impugned order passed by the Commissioner (Adjudication) Central Excise, Mumbai, demanding service tax from the respondents for providing services as an 'Interior Decorator' under Section 65 of the Finance Act, 1994. The Revenue contended that the respondents undertook activities like renovation, partitioning, false ceiling, and furnishing, which fell under the scope of interior decorating services. The respondents, however, argued that they received contracts for civil works such as plastering, painting, electrical works, flooring, and partitioning, and provided evidence of work orders specifying civil and electrical works. They maintained that they executed the work as per the drawing and designs supplied by the service recipients, thus not falling under the definition of an interior decorator.Upon examining the provisions of Section 65(59) of the Finance Act, the Tribunal noted that the definition of an 'Interior Decorator' includes providing services related to planning, design, or beautification of spaces. Referring to a previous tribunal case, the Tribunal established that execution of civil work, sanitation work, plumbing, electrical work, and wooden furniture does not fall under the scope of interior decorator services. The Tribunal observed that there was no evidence to show that the respondents provided advice, consultancy, or technical assistance related to planning or designing of spaces. Instead, the respondents executed the work based on the designs supplied to them. Consequently, the Tribunal found no merit in the Revenue's appeal and dismissed it, upholding the impugned order passed by the Commissioner (Adjudication) Central Excise, Mumbai.In conclusion, the Tribunal's detailed analysis of the definition of 'Interior Decorator' under the Finance Act, 1994, and the specific nature of services provided by the respondents led to the dismissal of the Revenue's appeal. The judgment clarified that mere execution of civil and electrical works based on supplied designs does not constitute services falling within the ambit of an interior decorator, emphasizing the importance of evidence regarding advice, consultancy, or technical assistance in such cases.