Customs, Excise and Gold Tribunal - Delhi
Rampur Engineering Co. Ltd. vs Commissioner Of Central Excise on 5 July, 2006
ORDER C.N.B. Nair, Member (T)
1. M/s Rampur Engineering Co. Ltd. is mainly engaged in the manufacture of conveyor systems and parts thereof. During the year 2001-02, they supplied drawing, design etc. to other manufacturers. Under the impugned order, service tax has been demanded on the income from such service under the heading "consulting engineer". The present appeal is directed against that order.
2. We have perused the record and heard both sides.
3. The record makes it clear that the appellant is an engineering company. Therefore, it comes within the definition of an "engineering firm" under the statute. The service rendered is in the nature of assistance by way of supplying drawing, design etc. prepared by the engineering division of the appellant. According to appeal papers themselves, this division is mainly of qualified Engineers like draughtsmen etc. Thus, clearly, the assistance would come in the category of engineering consultancy. Since the appellant satisfied the definition of 'consulting engineer' as an engineering firm under the statute and the service rendered is consulting engineers service, the tax demand is clearly within the ambit of law and is required to be upheld.
4. With regard to penalty, it is seen that while the Order-in-Original has imposed penalty under several sections, the Order-in-Appeal has upheld only one penalty equivalent to the service tax involved. Thus, the penalty cannot be considered as excessive in view of the fact that the appellant had not disclosed the fact of rendering such service to the tax authorities and also the long delay in the payment of service tax.
5. The last contention of the appellant is that for the purpose of valuation of the service, the entire realisation has been taken as the assessable value. The contention of the learned Counsel is that this is incorrect and the total realisation should be treated as inclusive of all taxes and the value should have been fixed only after deducting the tax element from the value. There is merit in this contention. Therefore, the jurisdictional Deputy Commissioner is directed to work out the amount of service tax after treating the gross realisation as inclusive of service tax. The appellant shall pay the tax amount so worked out. Since the penalty has been fixed equivalent to the tax involved, the appellant shall also get the benefit of reduction of penalty to the extent to which service tax amount is reduced.
6. The appeal is ordered in the above terms.
(Dictated and pronounced in open Court)