Works Contract not taxable as Consulting Engineering Service

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, held that composite turnkey construction contracts executed by a Central Public Sector Undertaking for roads, hospitals, educational institutions and public infrastructure projects cannot be artificially vivisected and taxed as "Consulting Engineer Service". 

The Tribunal found that the appellant was executing EPC-style works contracts involving procurement of materials, deployment of labour, engagement of subcontractors, project execution, quality assurance and maintenance obligations, and that the percentage fee received formed part of the overall contract consideration rather than consultancy charges. 

Consequently, the entire service tax demand raised under the category of Consulting Engineer Service was set aside.