Customs, Excise and Gold Tribunal - Tamil Nadu
Lakshmi Automatic Loom Works Ltd. vs Commissioner Of Central Excise on 10 April, 2007
Equivalent citations: [2007]9STJ137(CESTAT-CHENNAI), 2007[7]S.T.R.435, [2007]10STT259, (2008)13VST214(CESTAT-CHENNAI)
ORDER P.G. Chacko, Member (J)
1. Lower authorities have demanded Service Tax of Rs. 14,000 from the appellants and have imposed on them penalties. The above tax was sought to be levied on a gross amount of Rs. 2.8 lakhs received as service charges by the appellants from their clients during 2001-02. It appears from the records that the service charge was collected by the appellants from their clients for the servicing of 28 automatic weaving looms of the latter by the technicians of the former. This fact is evidenced by "purchase order" dated 05.09.2002 raised on the appellants by M/s. Lakshmi Mills Company Ltd. as also the Debit Note dated 23.10.2002 issued by the appellants to their clients. This is a fact acknowledged in the order of the original authority as well. It is the appellant's case that the work of servicing (repairs and maintenance) of the machines is not liable to be treated as 'consultancy', 'advice' or 'technical assistance' within the scope of the definition of "Consulting Engineer" given under Section 65 of the Finance Act. The technicians who attended to the machines of the clients were not professionally qualified engineers, nor found to be so by the lower authorities. Neither of the authorities has specified the discipline of engineering in which "Consulting Engineer's Service" was rendered by the appellants to their clients. Learned consultant for the appellants had reiterated this case. On the other hand, learned SDR reiterates the findings of the original and first appellate authorities.
2. After considering the submissions, I note that the relevant show-cause notice was issued on the basis of audit report. The audit officer had found that the appellants had received Rs. 2.8 lakhs in 2001-02 as service charges for the visit of technicians. The audit report (a copy furnished by the consultant) did not specify as to (a) whether they were professionally qualified engineers (b) whether they rendered any service in the nature of 'consultancy advice' or 'technical assistance' to the clients. The show-cause notice is only a reproduction of the auditor's report. Neither the original authority nor the first appellate authority examined the question whether the technicians deputed by the appellants for servicing of their clients machines were "Consulting Engineers" as defined under the Act. According to this definition, "Consulting Engineer" means any professionally qualified engineer or an engineering 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.
3. Learned Commissioner (Appeals) has assigned a wide meaning to the expression 'technical assistance'. According to him, this expression is wide enough to include actual works also. This is a misconception. The meaning of 'technical assistance' should be understood ejusdem generis with the preceding expressions viz. 'advice' and "consultancy'. The 'advice' is an advice only and does not involve any physical work. In 'consultancy' also, there is no physical work. Hence 'technical assistance' cannot involve any physical work such as repairs/maintenance/servicing. Apart from this, it has not been shown that the technicians deputed by the appellants for servicing of their clients' machinery were professionally qualified engineers so as to fall within the ambit of "Consulting Engineer" as defined under the Finance Act, 1994.
4. In the result, it is held that the servicing done by the appellant's technicians did not involve any 'advice', 'consultancy' or 'technical assistance' and the same was not to be treated as a "Consulting Engineer's Service". The impugned order is set aside and the appeal is allowed.
(Dictated and pronounced in open court)