COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX versus M/S SUZLON ENERGY LTD. on 10 April 2023

SUPREME COURT REPORTS

[2023] 4 S.C.R.

ACOMMISSIONER OF CUSTOMS, CENTRAL EXCISE &SERVICE TAX

v.

M/S SUZLON ENERGY LTD.

(Civil Appeal Nos. 11400-11401 of 2018)

B

APRIL 10, 2023

[M. R. SHAH AND KRISHNA MURARI, JJ.]

Finance Act, 1994 – ss.65(35b), 65(105)(zzzzd) – “designservices” – Respondent engaged in manufacture of Wind TurbineCGenerator (WTG), entered into a product development and purchaseagreement with its sister concern in Germany for manufacturingWTG in India – Various models of “Engineering Design &Drawings” were imported by the respondent for manufacturing ofWTG – If leviable to service tax under the category of “designDservices” as defined u/s.65(35b) r/w s.65(105)(zzzzd) – Held: Yes –Definition of “design services” is very clear and wide enough tocover all “design services” – Merely because “Engineering Design& Drawings” prepared and supplied by sister company of therespondent were shown as ‘goods’ under the Customs Act and inthe bill of entry, that by itself cannot be a ground to take suchEservices out of the definition of “design services” under the 1994Act – View taken by the CESTAT that the same activity cannot betaxed as goods and services is absolutely erroneous – Impugnedjudgment and order passed by the CESTAT setting aside the levy ofservice tax is quashed and set aside – However, matter remittedFback to the CESTAT to consider the grounds raised on behalf of therespondent.

Tax/Taxation:

Aspect theory – Application of – Held: There can be twodifferent taxes/levies under different heads by applying the aspectGtheory – The same activity can be taxed as ‘goods’ and ‘services’provided the contract is indivisible and on the aspect of services there may be levy of service tax.

Sale of goods and a contract of service – Distinction – Held:There is a distinction between the sale of goods and a contract ofHservice – What is relevant is the intention of the contracting parties.

Disposing of the appeals, the Court

Conclusion

HELD: The designs were to be exclusively used by therespondent in the territory of India and it was a tailormade design.The respondent engaged the sister concern M/s SEG for theactivity of “Engineering Design & Drawings” used inmanufacturing of WTG, that was reduced as blue print on paperand delivered to the respondent on the same medium. Such“designs” were subjected to the service tax even as per theclarification by the Board dated 18.03.2011 on the issue ofapplicability of indirect taxes on packaged software. Therefore,as such, the respondent was liable to pay service tax on the“design services” received from abroad under reverse charge.M/s SEG was a related unit, i.e. subsidiary of the assessee andthe amount received for service by M/s SEG from the assessee-respondent for the said “Engineering design & drawings” servicestherefore was liable to service tax under reverse charge in termsof the concept of ‘associated enterprise’. Despite this, M/s SEGraised the invoice/bill on the assessee treating it as ‘paper’.However, when the said bill of entry was presented treating thesame as ‘paper’ for which the duty payable was ‘Nil’. Therefore,neither any custom duty was paid due to exemption from paymentof duty treating it as ‘paper’ nor the service tax was paid. By adetailed judgment and order, the Commissioner held that therespondent was liable to pay the service tax under taxablecategory ‘“design services”. However, by the impugned judgmentand order, the CESTAT has held that the respondent is not liableto pay the service tax under “design services” under the FinanceAct, 1994 mainly on the ground that the custom authorityconsidered the same as ‘goods’ and therefore the same activitycannot be taxed as ‘goods’ and ‘services’. The aforesaid view isabsolutely erroneous. There can be two different taxes/leviesunder different heads by applying the aspect theory. The sameactivity can be taxed as ‘goods’ and ‘services’ provided thecontract is indivisible and on the aspect of services there may belevy of service tax. The aforesaid aspect has not at all beenconsidered by the CESTAT while passing the impugned judgmentand order. The definition of “design services” is very clear and itis wide enough to cover all “design services.” Merely because“Engineering Design & Drawings” prepared and supplied by A

B

C

D

E

F

GH

Asister company were shown as ‘goods’ under the Customs Actand in the bill of entry, by that itself cannot be a ground to takesuch services out of the definition of “design services” underthe Finance Act, 1994. Even otherwise, there is a distinctionbetween the sale of goods and a contract of service. What isrelevant is the intention of the contracting parties and whetherBthe contracting parties intend transfer of both goods and services,either separately or in an indivisible manner or in a compositemanner. The view taken by the CESTAT that the same activitycannot be taxed as goods and services is absolutely erroneous.The impugned judgment and order passed by the CESTAT settingCaside the levy of service tax is unsustainable and the samedeserves to be quashed and set aside. [Paras 7-9][335-F-H; 336-A-G; 337-A]

BSNL v. Union of India (2006) 3 SCC 1 : [2006] 2SCR 823 – relied on.

DSojitz Corporation v. Commissioner of Service Tax, NewDelhi 2009 (14) STR 642 (Tri. Delhi); HindustanShipyard Ltd. v. State of A.P. (2000) 6 SCC 579 : [2000]1 Suppl. SCR 592; Associated Cement Companies Ltd.v. Commissioner of Customs (2001) 4 SCC 593 : [2001]E1 SCR 608; Tata Consultancy Services v. State of A.P.(2005) 1 SCC 308 : [2004] 5 Suppl. SCR 1040 –referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 11400-G11401 of 2018.

From the Judgment and Order dated 02.05.2018 of the CustomExcise Service Tax Appellate Tribunal, West Zonal Bench at Mumbai inAN Nos. 87589 and 87590 of 2013.

H

N. Venkataraman, ASG, Rupesh Kumar, V. Chandra ShekharBharthi, Ms. Priyanka Das, Mukesh Kumar Maroria, Advs. for theAppellant.

V. Sridharan, Sr. Adv., Ms. Charanya Lakhmikumaran, SahilParghi, Vinay Kumar Jain, Ms. Apeksha Mehta, Aditya Bhattacharya,Ms. Monica Kasturi, Advs. for the Respondent.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 02.05.2018 passed by the Customs, Excise and ServiceTax Appellate Tribunal, West Zonal Bench at Mumbai (hereinafter referredto as the ‘CESTAT’) in Appeal Nos. ST/87589 & 87590/2013, by whichthe CESTAT has allowed the said appeals preferred by the respondent– M/s Suzlon Energy Limited (hereinafter referred to as the ‘respondent’)and has held that “Engineering Design & Drawings” of various modelsimported by the respondent for the purpose of manufacturing of WindTurbine Generator (for short, ‘WTG’) are not leviable to service taxunder the category of “Design Services” as defined under Section 65(35b)read with Section 65(105)(zzzzd) of the Finance Act, 1994 during theperiod June, 2007 to September, 2010, the Revenue has preferred thepresent appeals.

2. That the respondent herein was providing various taxableservices. The respondent was also in the manufacture of WTG. It hasthree subsidiary companies situated in Germany and Netherlands withwhom product development and purchase agreement had been enteredinto.

2.1 The respondent had entered into an agreement dated01.04.2007 (w.e.f. 01.01.2007) with M/s Suzlon Energy GmbH, Germany,a sister concern for the product development and purchase agreementto be used exclusively for manufacturing of WTG in the territory ofIndia. The products were exclusively defined in para 1.10 of the saidagreement.

2.2 The respondent, while importing these designs filed Bill ofEntry with the Custom authorities and classified the same as “Paper”under Chapter Sub-heading No. 49119920 of the Customs Tariff andclaimed benefit of ‘Nil’ rate of customs duty under Notification No. 021/

A

B

C

D

E

F

G

H

A2002 for BCD and Notification No. 020/2006 for CVD. That respondentclaimed that since the designs and drawings received by it vis customsroute by filing the Bill of Entry were “goods” and not “services”, it wasnot required to pay the service tax.

2.3 During the course of audit, it was noticed that the respondentBhad not paid service tax on “Engineering Design & Drawings” of variousmodels, used in the manufacturing of WTG, which was classifiable underthe category of “Design Services” for the period from June, 2007 toSeptember, 2010.

2.4 The appellant herein – Commissioner of Customs, CentralCExcise and Service Tax, Pune issued a show cause notice dated15.12.2001 to the respondent calling upon it to show cause as to why theservice tax to the tune of Rs.18,42,99,652/- on the value of taxableservices provided by it under the provisions of Section 73 of Chapter Vof the Finance Act and cess under Section 85 of Chapter VI of theFinance Act be not demanded. The respondent was also called upon toDpay the interest leviable under Section 75 and penalty under Section 76and 78 of the Finance Act. For the subsequent period , i.e., October,2010 to September, 2011, another show cause notice was issued on20.04.2012 demanding service tax of Rs.3,36,28,515/- on the value of“design service” from M/s SEG and M/s Suzlon Blade Technology,ENetherlands.

2.5 Vide Order-in-original dated 25.03.2012, the Commissioner –appellant herein confirmed the demands made in the show cause noticesas provider of “design services” taxable under Section 65(105)(zzzzd)and in accordance with the definition of the services in Section 65(35b)Fof the Finance Act, 1994. The Commissioner also levied interest as wellas the penalty.

2.6 Aggrieved by the Order-in-original passed by the Commissionerconfirming the demands of service tax and also levying the interest andpenalty, the respondent filed appeals before the CESTAT. By the impugnedGcommon order, the CESTAT has allowed the said appeals, relying uponits earlier decision in the case of Sojitz Corporation v. Commissionerof Service Tax, New Delhi, reported in 2009 (14) STR 642 (Tri.Delhi) and has held that the said design and drawings are ‘goods’ andnot ‘service’. The CESTAT has also observed and held that the taxationof goods and that of services are mutually and explicitly conceived levies,Hand therefore the same activity cannot be taxed as goods and as services.

Consequently, the CESTAT has set aside the Order-in-original on theground that “drawing and design” are to be treated as goods and thereforeit cannot be treated as service.

2.7 Feeling aggrieved and dissatisfied with the impugned commonorder passed by the CESTAT, the Revenue has preferred the presentappeals.

3. Shri N. Venkataraman, learned Additional Solicitor General ofIndia appearing on behalf of the Revenue has submitted that the substantialquestion of law arises for the consideration of this Court is, “whether“Engineering Design & Drawings” of various models imported by therespondent for the purpose of manufacturing of WTG are leviable toservice tax under the category of “Design Services” as defined undersection 65(35b) r/w section 65(105)(zzzzd) of the Finance Act, 1994during the period June, 2007 to September, 2010?

3.1 Shri N. Venkataraman, learned ASG has submitted that thecontentions of the respondent that any intellectual property put in a mediaat all times would only get classified as ‘goods’ and never as ‘services’may not be the correct statement of law. It is submitted that merelybecause the intellectual property put in a media, it would not per semake them goods. It would depend on whether the contracting partieshave understood it as a transfer or a sale of goods. It is submitted thatimportation of a set of tailor made or readymade drawings will constitutea sale of goods, whereas if a person engages a painter to draw a pictureof his choice and to his specifications and the delivery of the painting,even though on a canvas duly framed, may only constitute to a service,since the painter has engaged his entire intellectual effort in drawing thepainting for a particular customer and to his specifications and as heprogresses with the painting, the same is for a specific customer.

3.2 It is submitted that this can also happen in the case of “designs& drawings”. It is submitted that a set of tailor made drawings anddesigns or readymade drawings and designs would constitute a distinctclause when compared to preparation of drawings and designs under acontract of service for a specific customer to suit his specifications.

3.3 Shri N. Venkataraman, learned ASG has heavily relied uponthe decision of this Court in the case of BSNL v. Union of India, reportedin (2006) 3 SCC 1 (paras 44 & 45), in support of his submission on thedistinction between sale of goods and a contract of service. On the A

B

C

DEF

G

H

Adecision of this Court in the case of BSNL (supra) and the distinctionbetween sale of goods and a contract of service, Shri N. Venkataramanhas made the following submissions:

a) it held that sale in the conventional sense would mean theGannon Dunkerly test and, deemed sale involving both goods andBservices would be limited only to a work contract and food contract;

b) It made it clear that Article 366(29A) does not give a license toassume that a transaction is a sale and then to look around forwhat could be the goods. This would be an incorrect approachsince the expression goods had not been altered by the 46[th]amendment and the ingredients of sale continues to have the samedefinition; C

c) However, this does not mean that the content of the conceptsremain static, and the Courts must move with times;

d) It proceeded to hold that Article 366(29A) does not seek toDcover hospital services, lawyer services and other professionalservices, where during the course of rendering such services, theremay be a transfer of goods;

e) Treatment of a patient in a hospital and administration of pills inthe course of a treatment would not tantamount to sale; E

f)When a doctor writes out and hands over a prescription or alawyer drafts a document and delivers it to his/her client, strictlyspeaking, with a payment of fees, consideration does not passfrom the patient or client to the doctor or lawyer for the documentsin both the cases; F

g) However, these are mere services and do not involve a sale forthe purposes of Entry 54 List 2;

h) The reason is that ultimately one has to apply the GannonDunkerly test. If there is an instrument of contract which may becomposite in form, in any case other than the exceptions in ArticleG366(29A), unless the transaction in truth represents two distinctand separate contracts and is discernible as such, then the Statewould not have the power to separate the agreement to sell fromthe agreement to render service and impose tax on sale; H

COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICETAX v. M/S SUZLON ENERGY LTD. [M. R. SHAH, J.]

i) The test, therefore, for service contracts, other than the twocontracts falling under Article 366(29A), would be ‘did the partieshave in mine or intend separate rights arising out of the sale ofgoods? If there was no such intention, there is no sale even if thecontract could be disintegrated.’; and j) The test for deciding whether a contract falls into one categoryor another is, as what is the substance of the contract otherwisecalled, the dominant nature test.

3.4 It is submitted that therefore what is required to be consideredis, did the contracting parties intend transfer of both goods and services,either separately or in an indivisible manner or in a composite manner.

3.5 Shri N. Venkataraman, learned ASG has also submitted thefollowing illustrations in support of his submission that the “EngineeringDesign & Drawings” of various models imported by the respondent forthe purpose of manufacture of WTG are leviable to service tax andcannot be taxed as goods:

i) If a contracting parties A and B agree to the purchase of ahuge boiler for erection, installation and commission in a factory,the intention of the contracting parties would envisage the saleof a boiler as goods and a rendition of erection, installation andcommissioning as services. This contract can be either divisible,indivisible or composite. Whatever may be the nature of thecontract, the intending parties have contracted for both thesale of goods and the rendition of service.

ii) A patient is under medical treatment at a hospital and thedoctor had advised for a heart surgery and insertion of a stent.Here again, it involves two elements. The transfer of the stentfrom the hospital into the body of the patient and the renditionof medical services by the doctor through the hospital. Eventhough it involves both goods (stends) and services (medicalservices/hospital services), the contracting parties, namely, thepatient and the hospital, do not intend to buy and sell a stentand also a rendition of medical services as 2 items of sale andservice. The contract is essentially for the rendition of medicalservices and in the course of rendition, based on the advice ofthe doctor, a stent is inserted into the body of the patient.

A

B

C

D

E

F

G

H

A3.6 Making above submissions, it is prayed to allow the presentappeals.

4. Shri V. Sridharan, learned senior counsel appearing on behalfof the respondent has submitted that the precise question involved in thepresent appeal is, “whether service tax can be levied on pure sale (notBdeemed sale) of customises drawings/designs contained in a mediumprepared as per the specifications given by the customer.”

4.1 It is submitted that as per the settled position of law, supply ofgoods as per specifications given by the customer is also treated as saleof goods.

C

4.2 It is submitted that the first question is, whether supply ofgoods as per specifications given by the customer is a contract of sale ofgoods or merely a contract for work on labour. It is submitted that in thecase of Hindustan Shipyard Ltd. v. State of A.P., reported in (2000)6 SCC 579, it is held that if the thing to be delivered has any individualDexistence before the delivery as the sole property of the party who is todeliver it, then it is a sale. Further, if the bulk of material used inconstruction belongs to the manufacturer who sells the end product fora price, then it is a strong pointer to the conclusion that the contract is insubstance one for the sale of goods and not one for labour.

E4.3 Learned senior counsel appearing on behalf of the respondenthas heavily relied upon the decision of this Court in the case of AssociatedCement Companies Ltd. v. Commissioner of Customs, reported in(2001) 4 SCC 593. It is submitted that in the said decision, this Courthas held that any media which contain drawings or designs would beregarded as goods under the provisions of the Customs Act. It is observedFthat these items are movable goods and would be covered by Section2(22)(e) of the Customs Act. It is observed and held that the fact thatthe technology or ideas is tailormade would not make any difference.

4.4 It is submitted by Shri V. Sridharan, learned senior counselappearing on behalf of the respondent that it may be true that the decisionGof this Court in the case of Associated Cement Companies Ltd. (supra)may not be an authority for the proposition that service tax cannot belevied on pure sale of goods, the said decision is certainly an authorityfor the proposition that designs on a medium will be treated as goodsunder the natural definition of goods. It is submitted that the said decision H

is also an authority for the proposition that the amount paid by the importerto the original supplier is nothing but price for sale of such goods.

4.5 Shri V. Sridharan, learned senior counsel has also relied uponthe Constitution Bench decision of this Court in the case of TataConsultancy Services v. State of A.P., reported in (2005) 1 SCC 308.It is submitted that in the said decision, the question was, as to whethercanned software soled by the appellants can be termed to be “goods”and as such assessable to sales tax under the Andhra Pradesh GeneralSales Tax Act, 1957. It is submitted that in the said decision, this Courtaffirmed the decision in the case of Associated Cement CompaniesLtd. (supra) and held that intellectual property, once it is put on to amedia, whether it be in the form of books or canvas (in case of painting)or computer discs or cassettes and marketed would become “goods.”

4.6 It is further submitted that the intent of service tax legislationis not to levy service tax on sale of goods. It is submitted that sales tax islevied on sale of goods whereas the service tax is levied on provision ofservice. It is submitted that therefore a transfer of goods for a pricecannot be subject to service tax.

4.7 It is submitted that it is true that different aspects of a transactioncan be taxed through separate provisions. The aspect theory permitstaxation of two different aspects or features of a transaction. For instance,in a catering contract, supply of food was subject to value added tax andthe service aspect was subject to service tax. However, in the case ofBSNL (supra), this Court has observed that the aspect theory does notallow the value of goods to be included in services and vice versa.Reliance is placed on the observations made in para 88 of the saidjudgment.

4.8 It is further submitted by Shri V. Sridharan, learned seniorcounsel appearing on behalf of the respondent that before the CESTAT,the respondent raised a specific ground that the services (if any) renderedby a foreign entity will not fall within the purview of “design services”.The respondent also raised a specific ground that the extended period oflimitation cannot be invoked. However, though the said submissions havebeen noted be the CESTAT, the CESTAT has not dealt with thosecontentions and therefore it is prayed that the matter may be remandedto the CESTAT to decide all these questions.

AB

C

D

E

F

G

H

A5. We have heard learned counsel for the respective parties atlength.

The issue to be decided in the present appeals is “whether activityof import of “Engineering Design & Drawings” from the sister companiesby the notice during the period under dispute i.e., June, 2007 to September,B2010 is classifiable under taxable category “design services” under section65(35b) read with Section 65(105)(zzzzd) of the Finance Act, 1994 .

5.1 While considering the aforesaid issue, the definition of “designservices” under the Finance Act, 1994, as it stood during theimpugned period, is required to be considered, which reads asCunder:

SECTION 65. Definitions. -In this chapter, unless the contextotherwise requires,

……….

D(36b) design services” includes services provided in relation todesigning of furniture, consumer products, industrial products,packages, logos, graphics, websites and corporate identity designingand production of three dimensional models:

……….

E(105) (zzzzd) “taxable service” means any service provided or tobe provided, (zzzzd) to any person, by any other person in relation to designservices, but does not include service provided by-

(i) an interior decorator referred to in sub- clause (q); and F

(ii) a fashion designer in relation to fashion designing referredto in sub-clause (zv):

and the term “service provider” shall be construed accordingly.”

Thus, it can be seen that the definition of “design services” is aGwide and conclusive one, specifically excluding only fashion design andinterior designing, which were already taxable under separate taxablecategory.

6. In the present case, the respondent was engaged in manufactureof Wind Turbine Generator (WTG). It entered into ‘product developmentH

COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICETAX v. M/S SUZLON ENERGY LTD. [M. R. SHAH, J.]

and purchase agreement’ with three of its sister companies. Relevantclauses of the agreement, more particularly which defined the ‘product’read as under:

A

1.10.1‘Design and Development’ of all models of rated capacitygeared WTG together with all related and pertinentcomponents and therein required; B

1.10.2‘Design and Development’ of ‘Suzlon Flexislip System’together with all related and pertinent components andtherein required; 1.10.3All and any products that is developed by M/s SEGconceived (whether or not actually conceived duringregular business hours), discovered, or made by M/s SEGand its agents and employees during the course ofperforming its obligations under the Agreement; C

1.10.4Documentation including material and documentscontaining studies planning activities, manufacturingDprocess details in respect of above.

1.10.5All modifications made to the above, from time to time,and all other improvements developed and incorporatedwithin the above.

E

1.10.6Intellectual property and intellectual property rightsrelating thereto in so far it belongs to German InventionsLaw.

7. At this stage, it is required to be noted that the said designswere to be exclusively used by the respondent in the territory of Indiaand it was a tailormade design. The respondent engaged the sister concernM/s SEG for the activity of “Engineering Design & Drawings” used inmanufacturing of WTG, that was reduced as blue print on paper anddelivered to the respondent on the same medium. Such “designs” weresubjected to the service tax even as per the clarification by the Boarddated 18.03.2011 on the issue of applicability of indirect taxes on packagedsoftware. Therefore, as such, the respondent was liable to pay servicetax on the “design services” received from abroad under reverse charge.It was also found that M/s SEG was a related unit, i.e., subsidiary of theassessee and the amount received for service by M/s SEG from theassessee-respondent for the said “Engineering design & drawings”

F

G

H

Aservices therefore was liable to service tax under reverse charge interms of the concept of ‘associated enterprise’.

8. Despite the above, M/s SEG raised the invoice/bill on theassessee treating it as ‘paper’. However, when the said bill of entry waspresented treating the same as ‘paper’ for which the duty payable wasB‘Nil’. Therefore, neither any custom duty was paid due to exemptionfrom payment of duty treating it as ‘paper’ nor the service tax was paid.By a detailed judgment and order, the Commissioner held that therespondent was liable to pay the service tax under taxable category‘“design services”. However, by the impugned judgment and order, theCESTAT has held that the respondent is not liable to pay the service taxCunder “design services” under the Finance Act, 1994 mainly on the groundthat the custom authority considered the same as ‘goods’ and thereforethe same activity cannot be taxed as ‘goods’ and ‘services’. The aforesaidview is absolutely erroneous. As observed and held by this Court in thecase of BSNL (supra), there can be two different taxes/levies underDdifferent heads by applying the aspect theory. As per the settled position

of law now, the same activity can be taxed as ‘goods’ and ‘services’provided the contract is indivisible and on the aspect of services theremay be levy of service tax. The aforesaid aspect has not at all beenconsidered by the CESTAT while passing the impugned judgment andorder. As observed hereinabove, the definition of “design services” isEvery clear and it is wide enough to cover all “design services.” Merelybecause “Engineering Design & Drawings” prepared and supplied bysister company were shown as ‘goods’ under the Customs Act and inthe bill of entry, by that itself cannot be a ground to take such servicesout of the definition of “design services” under the Finance Act, 1994.

F

9. Even otherwise, as observed by this Court in the case of BSNL(supra), there is a distinction between the sale of goods and a contractof service. What is relevant is the intention of the contracting partiesand whether the contracting parties intend transfer of both goods andservices, either separately or in an indivisible manner or in a compositeGmanner. The issue is squarely covered by the decision of this Court inthe case of BSNL(supra) against the assessee and in favour of therevenue. Therefore, the view taken by the CESTAT that the same activitycannot be taxed as goods and services is absolutely erroneous. Nothingfurther has been discussed by the CESTAT, more particularly on thefindings recorded by the Commissioner recorded from para 20 onwards.H

Under the circumstances, the impugned judgment and order passed bythe CESTAT setting aside the levy of service tax is unsustainable andthe same deserves to be quashed and set aside.

However, at the same time, as other grounds raised before theCESTAT, namely, “whether the services (if any) rendered by a foreignentity will or will not fall within the purview of “design services” andinvocation of extended period of limitation have not been considered bythe CESTAT and therefore learned counsel for the respondent is justifiedin praying to remand the matter to CESTAT to decide the aforesaid twogrounds.

10. In view of the above and for the reasons stated above, theimpugned judgment and order passed by the CESTAT holding that therespondent is not liable to pay service tax as “design services” onimporting various models of “Engineering Design & Drawings” for thepurpose of manufacturing of Wind Turbine Generator (WTG), as definedunder Section 65(35b) r/w section 65(105)(zzzzd) of the Finance Act,1994 is hereby quashed and set aside. However, the matter is remittedback to the CESTAT to consider the grounds raised on behalf of therespondent, namely, whether the services (if any) rendered by a foreignentity will not fall within the purview of “design services” and that thedepartment was not justified in invoking the extended period of limitation.It is made clear that the matter is remitted back to CESTAT to considerthe aforesaid two grounds and none other. Insofar as the issue of levy ofservice tax on the “Engineering Design & Drawings” is concerned, thesame is decided in favour of the revenue and against the assessee.

11. The instant appeals stand disposed of in terms of the above.However, in the facts and circumstances of the case, there shall be noorder as to costs.

Divya Pandey

Appeals disposed of.

(Assisted by : Abhishek Pratap Singh and Roopanshi Virang, LCRAs)

A

B

CD

E

F

G

H