The assessee was registered with the service tax department under ‘Interior decorator servcies’. During the period April 2007 to March 2009, the assessee treated the services performed by it as ‘works contract services’ and paid service tax at the rate of 2 per cent after availing concessional rate of 2 per cent under rule 3(1) of the Works Contract (Compensation Scheme for Payment of Service Tax) Rules, 2007. On appeal to Tribunal, the assessee contended that it had wrongly registered under the category of ‘interior decorator service’. It was not only providing materials like gypsum boards, etc. to the customers but was also taking up the work of making false ceiling with these items. Hence the services performed by it were very much in the nature of ‘works contract’ and not as ‘interior decorator’.
Services provided by assessee could not be brought within fold of ‘interior decorator service as per Clause (59) of Section 65 of the Finance Act, 1994 defines “interior decorators” as —interior decorators” means any person engaged whether directly or indirectly in the business of providing by way of advice, consultancy, technical assistance or in any other manner, services related to planning, design or beautification of space whether man-made or otherwise and includes a landscape designer”. Further the appellant cannot then be brought within the fold of Interior Decorator Service. Show cause notices have also proposed demand of differential tax on the ground that provisions of Section 66 and 68 of the Finance Act, 1994 and Rule 3 of the Compensation Scheme have been contravened by not exercising the option as required under the Compensation Scheme etc.
Citation: [2018] 96 taxmann.com 560 (Chennai – CESTAT)