Service Tax
TRT-2025-
Supreme Court
Date:-10-04-23
In:-
Issue Favourable to Tax Payer ?:-
Order date – 10 April 2023
Parties – Commissioner of Customs, Central Excise & Service Tax Vs M/s Suzlon Energy Ltd.
Facts –
- The respondent, M/S SUZLON ENERGY LTD., was in the manufacture of Wind Turbine Generator and had entered into an agreement with a sister concern in Germany for product development and purchase.
- The respondent filed Bill of Entry with the Custom authorities and classified the designs and drawings as "Paper" under Chapter Sub-heading No. 49119920 of the Customs Tariff and claimed the benefit of 'Nil' rate of customs duty.
- During the audit, it was noticed that the respondent had not paid service tax on the Engineering Design & Drawings of various models used in the manufacturing of WTG, classifiable under the category of "Design Services."
Issue –
- Whether activity of import of “Engineering Design & Drawings” from the sister companies is classifiable under taxable category “design services”?
Order –
- The Supreme Court observed that the definition of “design services” is wide enough to cover all “design services” and that the activity of “Engineering Design & Drawings” supplied by M/s SEG fell under the definition of “design services”.
- It also noted that the fact that the activity was shown as ‘goods’ under the Customs Act was not a ground to take such services out of the definition of “design services”.
- Therefore, the respondent was liable to pay service tax under “design services” under the Finance Act, 1994.
- The instant appeals stand disposed of. However, in the facts and circumstances of the case, there shall be no order as to costs.
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