Surface Engineers manufacture and supply centralised lubrication system. They also undertake erection and commissioning at the site as a part of their business activity. Surface Engineers paid the central excise duty on

Surface Engineers manufacture and supply centralised lubrication system. They also undertake erection and commissioning at the site as a part of their business activity. Surface Engineers paid the central excise duty on whole value of centralised lubrication system including that for services of erection and commission. They did not pay the service tax separately on the value of services contending that there could not be levy of tax under two parliamentary legislations on the same transaction. The Department demanded service tax on the value of service and imposed penalty on Surface Engineers. Examine with the help of case law whether the action of the Department is lawful.