2004 (5) TMI 4 - AT - Service Tax

Service Tax Consulting Engineer Any professionally qualified Engineer or Engineering firm who rendered any service to a client are liable to the imposition of service tax

Summary

Issues:
1. Appeal against the order-in-original confirming service tax liability.
2. Classification of services as consulting engineer's services.
3. Interpretation of Section 65(18) of the Finance Act, 1994.
4. Argument regarding the nature of services provided by the appellants.
5. Comparison with relevant case laws.
6. Decision based on case analysis and affirmation of lower authorities' orders.

Analysis:
1. The appeal before the Appellate Tribunal was against the order-in-original confirming a demand of service tax of Rs. 3,12,320/- along with interest of Rs. 84,929/- against the appellants under Section 75 of the Finance Act, 1994. The service tax was levied on the appellants for the consulting engineer's services they rendered, leading to the rejection of their appeal by the Commissioner (Appeals).

2. The appellants argued that they were engaged in manufacturing engineering goods and had recovered technical service charges from clients, which were not disclosed to the authorities initially. The services provided were related to the installation and commissioning of machinery at clients' sites, leading to a dispute over the classification of these services as consulting engineer's services.

3. The interpretation of Section 65(18) of the Finance Act, 1994 was crucial in determining the liability for service tax. The section defined a consulting engineer as any professionally qualified engineer or engineering firm providing services to a client. This definition formed the basis for the imposition of service tax on services rendered by consulting engineers.

4. The appellants contended that their services, such as manufacturing industrial machinery and providing installation services, did not fall under the category of consulting engineering services. They argued that the consulting engineer services should be distinct from the activities they were engaged in, which involved manufacturing and installation of machinery at clients' sites.

5. The Tribunal considered relevant case laws, including judgments from the Hon'ble High Court of Karnataka and the Hon'ble Calcutta High Court. These judgments highlighted that the Act did not differentiate between various types of service providers, emphasizing that any entity providing consulting services could be liable for service tax, irrespective of their organizational structure.

6. Based on the submissions and case analysis, the Tribunal concluded that the appellants, by providing consulting engineer services to clients, were indeed liable for service tax. The Tribunal found no grounds to interfere with the orders of the lower authorities, leading to the rejection of the appeals and affirmation of the lower authorities' decisions.