2007 (3) TMI 65 - AT - Service Tax

Consulting Engineer Service Revenue contended that the appellant activity i.e. procured order for making engineering designs as per the requirement and then designs sold by discharging sales tax covered under Consulting Engineer Service Held revenue contention is not correct

Summary

Issues:
1. Whether the appellants can be classified as 'Consulting Engineer' for service tax levy.
2. Validity of the Commissioner's revision order setting aside the Deputy Commissioner's order.

Analysis:
1. The appeal in question challenges the Order-in-Original (Revision) passed by the Commissioner of Services Tax, Bangalore, bringing the appellants under the category of 'Consulting Engineer' for service tax imposition. The appellants contended that they were not engaged in Consulting Engineer activities but rather procured orders for engineering designs, which were sold as goods, subject to sales tax. The Commissioner, in the impugned order, disregarded the sale of goods aspect and considered the appellants' trading activity as falling under Consulting Engineer services. However, upon review, the Tribunal found that the appellants' activities did not align with Consulting Engineer services. The Tribunal referenced judgments by the Apex Court and previous decisions to support its conclusion that since the appellants were selling goods (drawings) and discharging sales tax, they could not be classified as Consulting Engineers for service tax purposes.

2. The Tribunal, after hearing both sides, determined that the Commissioner's findings were incorrect. It emphasized that the appellants' actions of procuring orders for drawings and selling them as goods subject to sales tax did not constitute Consulting Engineer services. Notably, the Tribunal highlighted that the Revenue did not dispute the appellants' sale of goods. Relying on established legal precedents, including judgments by the Apex Court and previous decisions by the Bench, the Tribunal concluded that the appellants' activities did not fall within the ambit of Consulting Engineer for service tax levy. Consequently, the Tribunal deemed the Deputy Commissioner's order as correct and held that the Commissioner's revision order was legally flawed. As a result, the appeal was allowed, granting any consequential relief deemed appropriate.

This detailed analysis of the judgment showcases the Tribunal's thorough examination of the issues at hand, the legal principles applied, and the ultimate decision reached in favor of the appellants.