Custom, Excise & Service Tax Tribunal
C.C.E., Jaipur I vs Consulting Engineers Groups Ltd on 15 May, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing/decision: 15.5.2014 Service Tax Appeal No.468 of 2007 Arising out of the order in appeal No.108-109(GRM(/ST/ JPR-I/2007 dated 18.5.2007 passed by the Commissioner (Appeals), Customs & Central Excise , Jaipur. For approval and signature: Honble Mr. Justice G. Raghuram, President Honble Mr. Rakesh Kumar, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? C.C.E., Jaipur I .. Appellant Vs. Consulting Engineers Groups Ltd. . Respondents
Appearance:
Present Ms. Suchitra Sharma, A.R. (Jt.CDR) for appellant/Revenue Present Shri Yogendra Aldak, Advocate for the respondents Coram: Honble Mr. Justice G. Raghuram, President Honble Mr. Rakesh Kumar, Technical Member Final Order No. 52143/2014 Per Justice G. Raghuram:
Revenue has preferred this appeal against the order passed by the Commissioner (Appeals), Customs and Central Excise, Jaipur dated 18.5.2007 whereby the appellate authority allowed the appeal preferred by the respondent/assessee.
2. The Joint Commissioner, Central Excise, Jaipur I passed the adjudication order dated 30.3.2007 confirming service tax demand of Rs.17,85,768/-, apart from interest and penalties on the conclusion that assessee had provided consulting engineer service, defined in Section 65 (31) read with Section 65 (105)(g) of the Finance Act, 1994 during the period 2001-03. Show cause notice was issued alleging that the assessee had suppressed the gross consideration received for having provided the taxable service in its ST-3 returns; and that the suppression came to light when the ST -3 returns were compared with the income tax returns filed by the assessee.
3. In response, the assessee inter alia submitted that Rs.1,40,26,960/- is the consideration received for having provided the activity of soil testing, survey work, drilling survey to the National Highways Authority of India and this consideration falls outside the ambit of consulting engineer service. Another contention of the assessee was that amounts received by way of reimbursement of expenses for providing the consulting engineer service are liable to be excluded i.e. an amount of Rs.90,03799/-. The third defence was that Rs.1,24,35,805/- was the service tax liability i.e. remittable by the principal consultants, namely Louis Berger Inc. and Scott Wilson Kirkpatrick India Pvt. Ltd. A general defence was also asserted, that since the assessee was a company registered under the Companies Act, 1956, it was outside the ambit of the definition of consulting engineer which includes only a consulting engineering firm; and only with effect from 1.5.2006 that Section 65(31) was amended to bring within the ambit of the definition any body corporate.
4. The primary authority rejected the contention of the assessee and confirmed the liability to service tax, interest and penalties, as specified.
5. Aggrieved, the assessee preferred an appeal. The Appellate Commissioner allowed the appeal holding : (a) that soil testing and survey work services provided by the assessee were outside the scope of consulting engineer service, defined in Section 65(31) read with Section 65(105)(g); (b) since the assessee had provided service as an associate consultant to principal consultants, a service provided not to a client but to another consultant, the activity falls outside the specified taxable service and is not liable to tax as consulting engineer service. The Appellate authority also deleted reimbursement of expenses amounts received by the assessee from the taxable value under provisions of Section 67 of the Act. As a consequence, the appeal of the assessee was allowed.
6. Ld. Counsel for the respondent/assessee refers to the decision of the Karnataka High Court and the Delhi High Court in C.S.T., Bangalore vs. Turbotech Precision Engineering Pvt. Ltd. 2010 (18) STR 545 (Kar.) and C.C.E.& Service Tax vs. Simplex Infrastructure & Foundry Works 2014 (34) STR 191 (Del.), for the contention that since the assessee is a company registered under the provisions of Companies Act, 1956, it falls outside the purview of the definition of consulting engineer in Section 65(31) , as the provisions stood during the relevant period 2001-03. It requires to be noticed that with effect from 1.5.2006, Section 65(31) was amended to bring within the ambit of the definition of consulting engineer , any body corporate. Prior to 1.5.2006, consulting engineer is defined to mean any professionally qualified engineer or any other firm who either directly or indirectly renders any advice, consultancy or technical assistance in any manner to a client in one or more disciplines of engineering.
7. The scope of the amendments to Section 65(31) with effect from 01.05.2006, was considered by the Karnataka and Delhi High Courts in the aforesaid decisions. Both Courts concluded that it is only with effect from 1.5.2006 that a body corporate comes within the ambit of consulting engineer service in Section 65(31).
8. In the light of the above decisions, the respondent/assessee falls outside the purview of the definition consulting engineer, since it is a company registered under the Companies Act,1956, and the relevant period is 2001-03, prior to 1.5.2006. On the aforesaid analysis, there is no merit in Revenues appeal which is dismissed but in the circumstances without costs.
(Justice G. Raghuram) President (Rakesh Kumar) Technical Member scd/ 1