2010 (5) TMI 299 - AT - Service Tax

Classification of Services: Interior Decorator vs. Commercial Construction

Spandrel Versus Commissioner of Central Excise, Hyderabad

The case involved the classification of services as either 'Interior Decorator Service' or 'Commercial or Industrial Construction Service'. The Tribunal ... Interior Decorator Service - Assessee were undertaking interior works such as pest control, demolition & dismantling, masonry work, wall preparation etc. The lower authorities held that above service provided by the assessee would not fall under category of 'Interior decorator's service' and accordingly confirmed demand. Held that - since services rendered by assessee were brought for first time in definition of 'Commercial or Industrial Construction Service' w.e.f. 16.06.2005, activities of assessee during relevant period would not be covered under definition of 'Interior decorator's service'. Issues:1. Classification of services under 'Interior Decorator Service' or 'Commercial or Industrial Construction Service'.2. Interpretation of the definition of 'Interior Decorator Service' under section 65(59) of the Finance Act, 1994.3. Application of departmental clarifications on the issue.4. Analysis of relevant case laws and precedents.Classification of services under 'Interior Decorator Service' or 'Commercial or Industrial Construction Service':The case involved the classification of services provided by the appellants as either 'Interior Decorator Service' or 'Commercial or Industrial Construction Service'. The lower authorities had issued show-cause notices to the appellants for not discharging service tax liability on services related to interior works. While the adjudicating authority confirmed demands and penalties for some appellants, it was dropped for one, but later confirmed by the Commissioner under revision order.Interpretation of the definition of 'Interior Decorator Service' under section 65(59) of the Finance Act, 1994:The advocates for the appellants argued that the services rendered by the appellants were more aligned with 'Commercial or Industrial Construction Service' rather than 'Interior Decorator Service'. They emphasized that the definition of 'Interior Decorator Service' includes providing advice, consultancy, and technical assistance, which was not the case with the appellants' services. The Tribunal noted that the lower authorities failed to establish that the appellants provided advice, consultancy, or technical assistance as required by the definition.Application of departmental clarifications on the issue:The departmental representative argued that the services provided by the appellants fell under 'beautification of spaces' as per the definition of 'Interior Decorator Service'. However, the appellants highlighted clarifications on 'Commercial or Industrial Construction Service' post the 2005 amendment, indicating that services like glazing, plastering, painting, etc., were specifically included. This clarification suggested that such services were not covered under 'Interior Decorator Service' before the amendment.Analysis of relevant case laws and precedents:The Tribunal referred to various case laws and precedents to support its decision. It highlighted that if a category of services is brought into the service tax net from a specific date, those services would not fall under any other category. Citing cases like Chennai Telephones (BSNL) and Jet Airways (India) Ltd., the Tribunal concluded that the activities of the appellants during the relevant period did not fit the definition of 'Interior Decorator Service'. Therefore, the impugned orders were set aside, and the appeals were allowed.This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the arguments presented by both sides, the interpretation of legal provisions, and the application of relevant case laws to reach a final decision.