Appellate Tribunal upholds Service Tax refund for turnkey project in Coca Cola plant

The Appellate Tribunal CESTAT, New Delhi rejected the Revenue's appeal against the Order-in-Appeal allowing a Service Tax refund to an engineering firm for a turnkey project involving a Coca Cola Bottling Plant. The Tribunal affirmed that the services obtained by the firm were not subject to Service Tax as argued by the Revenue, citing previous Tribunal and Supreme Court decisions that turnkey projects are not liable to Service Tax under consulting engineering services. The Appeal was dismissed, and the firm's cross objection was disposed of accordingly.

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Issues involved: Appeal against Order-in-Appeal allowing Service Tax refund to engineering firm for turnkey project.

Summary:
The Appellate Tribunal CESTAT, New Delhi heard the Appeal filed by the Revenue against the Order-in-Appeal allowing the Service Tax refund to an engineering firm for a turnkey project. The project involved a 'Multiserve Line 600 BPM Coca Cola Bottling Plant' executed for a company. The Revenue argued that the amount charged for project management and design should be subject to Service Tax u/s 65(31) of the Finance Act, 1994. However, the Commissioner (Appeals) agreed with the firm's contention that the services were obtained from other entities who had already paid the Service Tax. The Revenue contended that Service Tax is payable on the gross amount charged by the service provider u/s 67 of the Finance Act, 1994. The firm's Advocate cited a Tribunal case and a Supreme Court decision to support the argument that works contract for turnkey projects is not liable to Service Tax under consulting engineering services. The Tribunal's decision in a similar case was affirmed by the Supreme Court, emphasizing that a turnkey project cannot be vivisected for Service Tax purposes. Consequently, the Appeal of the Revenue was rejected, and the cross objection filed by the firm was disposed of.

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