Commissioner of Customs ,Central Excise & Service-tax Vs Suzlon Energy Ltd (Supreme Court)
Date-10th April 2023
Sub-Whether custom made design imported on a blue print is goods and thus not liable for payment of service tax under the head design services?

The Supreme Court was considering service tax demand for the period June 2007 to September 2010 when the design services were received by the respondent Suzlon from its associate enterprise and it was claimed that as the same was imported on a paper and it was held to be goods under the Customs Act, the same was not liable for service tax payment. The Department contended that following BSNL’s case when the goods and services are imported under a composite contract, then the intention of parties is relevant as to whether the parties intended to transfer of both goods and services , either seperately or in an divisible manner or in a composite manner. Several examples like hospital supplying stent while performing a heart operation, a painter specially painting on canvass as per directions etc were given which heavily weighed in the minds of Ld Judges and it was thus held that the declaration in bill of entry as goods and acceptance under the Customs cannot be determinative of transaction and the import of design and drawings in a paper was import of service liable for service tax under the applicable provisions.

This judgement is an important judgement which will be helpful in dealing with Customs, excise and GST Cases also.

Ramesh Patodia
11-04-2023