2003 (9) TMI 2 - AT - Service Tax

Service Tax Consulting Engineer (1) Valuers of Plant and Machinery (2) Non-filing of service tax return (3) Penalty

Summary

Issues:
Revenue's challenge to Order-in-Appeal allowing party's appeal with consequential relief; Whether functions performed by respondent fall under the definition of "Consulting Engineer."

Analysis:
The Revenue challenged the Order-in-Appeal allowing the party's appeal, which was related to the issue of whether the functions performed by the respondent fell under the definition of "Consulting Engineer." The proceedings were initiated against the respondent for failing to collect and deposit Service Tax, submit quarterly statements, and obtain registration under Service Tax. The original authority imposed a penalty, which was challenged by the appellant. The Commissioner (Appeals) allowed the appeal, stating that the functions performed by the appellant were mainly that of a valuer, not a Consulting Engineer. The Revenue contended that the services provided by the appellant fell under the definition of Consulting Engineer. The respondent argued that the functions performed by him were not consulting engineering but rather specialized tasks. The Tribunal examined the functions performed by the respondent, including planning of building, property valuation, and preparation of ground plans, in the context of the definitions provided in the relevant sections of the Act.

The Tribunal observed that the definition of "Consulting Engineer" included professionally qualified engineers providing advice, consultancy, or technical assistance in engineering disciplines. The Commissioner (Appeals) made irrelevant observations about unemployed engineers, which the Tribunal deemed as not pertinent to the legal issue at hand. Referring to relevant case law, the Tribunal concluded that all functions performed by the respondent fell within the ambit of "Consulting Engineer." The Tribunal cited judgments from various High Courts to support its decision, emphasizing that services provided by valuers could be considered as engineering advice and thus liable for service tax. Therefore, the Tribunal held that the Order-in-Appeal was not legal and proper and set it aside.

Regarding the penalty imposed on the respondent, the Tribunal noted that the original authority had incorrectly applied Section 77 of the Act, which dealt with penalties for failure to furnish returns. The Tribunal reduced the penalty and upheld the direction for the respondent to obtain Central Excise Registration under Service Tax and submit relevant returns. The appeal of the Revenue was allowed to the extent indicated above, based on the Tribunal's findings and analysis of the case.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, relevant legal provisions, case law references, and the Tribunal's reasoning leading to the final decision on the appeal.