Custom, Excise & Service Tax Tribunal
Yes vs Represented By : Shri P.N. Sarvaiya, A.R on 7 November, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : ST/99 of 2007 Arising out of : OIA No. Commr(A)/260/VDR-II/2006 dated 12.01.2007 Passed by : Commr. (Appeals) C. Excise & Customs, Vadodara For approval and signature : Mr. M.V. Ravindran, Hon'ble Member (Judicial) Mr. H.K. Thakur, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant (s) : Commissioner of Central Excise & S.T., Vadodara Represented by : Shri P.N. Sarvaiya, A.R. Respondent (s) : M/s. Deshpande Patil Consultants
Represented by : Shri A.X.S. Jiwan, Consultant CORAM :
Mr. M.V. Ravindran, Hon'ble Member (Judicial) Mr. H.K. Thakur, Honble Member (Technical) Date of Hearing / Decision : 07.11..2013 ORDER No. A/11591/2013 Dated 07.11.2013 Per : Mr. M.V. Ravindaran;
This appeal has been filed by the Revenue against OIA No. Commr(A)/260/VDR-II/2006 dated 12.01.2007.
2. Heard both sides and perused the records.
3. The issue involved in this case is regarding the demand of service tax liability during the period April 1999 to March 2004, under the category of Consulting Engineering Services. Lower authorities were of the view that respondent herein has rendered the services of Consulting Engineering Services during the material period by taking up the soil testing, exploration survey and map making for laying pipe lines. Adjudicating authority after following the due process of law confirmed the demands raised along with interest and also imposed penalties. On an appeal against such an order, the first appellate authority has set-aside the impugned order in original by holding that the activities undertaken by the respondent (appellant before her) would get covered under the category of Survey and Map making by agencies other than the Government, would be chargeable to service tax from 16.7.2005.
4. On perusal of the grounds of appeal, we find that the Revenue has only relied upon the definition of Consulting Engineer Services and has argued on the point that respondent has rendered technical assistance to their clients in respect of laying of pipelines. It is the submission that the said technical assistance would get covered under the definition of Consulting Engineering Services.
5. Learned consultant on the other hand would draw our attention to the fact that respondent is doing only survey work which comprises of carrying of redundant survey for deciding the route of proposed pipelines including estimation of length of pipelines, identification of statutory authorities involved, various crossings en-route, villages, Talukas, Districts, major Oil/ Gas pipelines, mining places and carrying out cadastral survey for land acquisition etc. He would submit that an identical issue came up before this Bench in the case of CCE, Vadodara-II vs. Mascon Multiservices & Consultants Pvt. Limited and this Bench vide final order No. A/2687-2688/WZB/AHD/2008 dated 01.12.2008 has rejected the appeal filed by the Revenue. It is also his submission that the said order was taken in appeal by the revenue before the Honble High Court and their Lordship have decided the issue in favour of the respondent by dismissing the Tax Appeal No. 757/2009 filed by the Revenue.
6. On perusal of the records, we find that there is no dispute as to the facts as stated by both sides. It is seen from the records that the first appellate authority has recorded in her impugned order the reasoning for coming to a conclusion as to why the Revenues case does not hold any strength for classifying the services provided by the respondent under Consulting Engineering Services. The relevant portion of the order is reproduced below:-
4.6 It is seen that the services rendered by the Appellants basically involve carrying out survey work relating to routing of gas pipeline; grid, contour and engineering survey; preparation of maps and drawings of gas fields, detailed soil investigation report, chemical analysis of soil, etc. The applicants execute the job at site using various surveying and soil testing instruments and submit the drawings, reports and data to their client. For a service to be covered under Consulting Engineers Service, it is necessary that the services involved element of consultancy, advice or technical advice. Quite clearly the activities undertaken by the Appellants do not involve any consultancy or advice. These activities would also not be covered under technical assistance as used in the definition of Consulting Engineers Service for these words are used in conjunction with consultancy and advice and accordingly, the words technical assistance also have to be interpreted in that light. The drawings, reports and data are just documentation of factual information at site and are not in the nature of advice, consultancy or technical assistance. I am, therefore, inclined to agree with the Appellants that the services provided by them are not covered under the category of Consulting Engineers Service.
4.7 While coming to the above conclusion, I also draw support from the fact that Technical Testing and Analysis has been introduced as a New Service w.e.f. 01.07.2003, Survey or Exploration of Mineral Services w.e.f 10.09.2004 and Survey and Map Making by Agencies other than Government w.e.f. 16.07.2005. as well as the fact that the services under consideration are clearly covered under those heads/categories. Technical Testing and Analysis Service was introduced as new services vide Finance Act, 2003 and the Board vide circular No. 59/8/2003-ST dated 20.06.2003 referred to it as a new service. Survey and Exploration of Minerals was also introduced as a new service vide Finance Act, 2004and the Board vide Circular No. B2/8/2004-TRU dated 10.09.2004 clarified that activities such as seismic survey, collection/ processing/interpretation of data and drilling or testing in relation to survey and exploration of minerals would fall within the ambit of taxable service. It is further observed that Survey and Map Making was also introduced as a new service vide Finance Act, 2005 and the Board vide Circular No. B1/6/2005-TRU dated 27.07.2005 clarified that it covers surface surveying, services of gathering information on the shape, position or boundaries of a portion of earths surface by methods such as transit, photogrammetric, or boundaries, or hydrographic for the purpose of preparing maps and that map making consists of preparation or revision of maps of all kinds such as topographic, hydrographic, roads, planimetric, cadastral, city maps etc. using various information sources. Quite clearly, the activities carried out by the appellants are of the nature referred in under the aforesaid circulars.
4.8 Under sub-section (2) of section 65(a), when or any reason a taxable service is prima facie classifiable under two or more sub clauses or clause 105 of section 65, classification shall be preferred under the sub-clause which provides the most specific description to sub-clauses providing a more general description. Board vide Circular No. 51/13/2002 dated 07.01.2003 also classified that a service should be categorized under the category which is more specific. There is also no instruction/clarification etc. from the board at the time of introduction of these new services that the related activities were earlier covered by CES and with the introduction of the new services in question, these activities will now be covered by the new services as above. Further, in somewhat similar situation, in respect of commissioning or installation services, which was introduced as a new service w.e.f. 01.07.2003 and in respect of which it had been earlier clarified by the Board vide Circular No. 49/11/2002-ST dated 18.12.2002 issued from F.No.137/13/2001/CX.4 that the same are covered under Consulting Engineers Service, the Board vide circular No. 79/9/2004 dated 13.05.2004 clarified that these services will be separately chargeable under commissioning or installation services w.e.f. 01.07.2003 and not chargeable under Consulting Engineers Service. Following the reasoning of the above circular dated 13.05.2004, it follows that the subject services viz., Soil Testing became taxable first time as New Services under the category of Technical Testing and Analysis w.e.f 01.07.2003. Survey and Exploration of Mineral category w.e.f 2004 and Survey and Map Making w.e.f 2005 and are, therefore, not chargeable under Consulting Engineers Service prior to such respective dates. 4.9 In view of the reasons mentioned above, particularly the fact that the services rendered by the Appellants do not involve any consultancy, advice and technical assistance as well as the fact that the new services covering the services in question have been introduced at a later date. I am inclined to agree with the Appellants that during the period in dispute these services are not taxable under the category of Consulting Engineers Service. In this regard, I also rely on the Hon.ble Tribunals decision in the case of CCE vs MRF Ltd., - 2006(3)S.T.R. 434 (Tri. Chennai) wherein it was held that the Scientific and Technical Consultancy Services, which was a new service introduced on 16-7-2001, was not a part of the pre-existing Consulting Engineer Service prior to the said date. On the same analogy, the services rendered by the Appellants, being new services introduced from the respective dates, will not be part of the pre-existing Consulting Engineers Service prior to the said dates. Accordingly, the demand confirmed by the Adjudicating Authority is not sustainable and hereby set aside. Since the demand is not sustainable, penalty and interest cannot also sustain. It can be seen from the above reproduced paragraphs that the learned Commissioner (Appeals) has gone into the factual position and come to a conclusion for holding that respondents services can be classified only under Survey and Map making Services, that also with effect from 16.7.2005. We also find that an identical issue was decided by this Bench in final order dated 01.12.2008 in the case of Mascon Multiservices & Consultants Pvt. Limited wherein we held in favour of the assessee. It is also seen that the said judgment of the Tribunal has been upheld by the Honble High Court of Gujarat, as has been correctly pointed out by the learned consultant.
7. In view of the foregoing, we do not find any reason for interfering in the conclusion reached by the first appellate authority in the impugned order before us. In our view, impugned order is correct, legal and does not suffer from any infirmity.
Appeal is rejected.
(Dictated and pronounced in the Court)
(H.K. Thakur) (M.V. Ravindran)
Member (Technical) Member (Judicial)
..KL
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ORDER No. A/11591/2013 Dated 07.11.2013