2007 (6) TMI 525 - AT - Service Tax

Consulting Engineer service - transfer of technology by foreign company - scope of service - appellant located abroad - Jurisdiction of Commissioner -

Summary

Issues:
1. Whether the services provided by the appellants fall under the category of "Consulting Engineer" for Service Tax purposes.
2. Jurisdiction of the Commissioner to proceed against the foreign company.
3. Validity of the Order-in-Appeal setting aside the demands confirmed in the Order-in-Original.

Analysis:
1. The main issue in this case is whether the services provided by the appellants can be classified as "Consulting Engineer" services for the purpose of Service Tax. The Commissioner (A) set aside the demands confirmed in the Order-in-Original, stating that the transfer of technology by the foreign company to the Indian Company did not fall under the ambit of "Consulting Engineer." The Commissioner relied on a decision of the Hon'ble CESTAT, West Zonal Bench, Mumbai in a similar case. The Commissioner concluded that the services rendered by the appellants, involving the transfer of technical know-how and assistance, did not qualify as "Consulting Engineer" services. The appeal was allowed based on this finding.

2. Another issue raised was the jurisdiction of the Commissioner to proceed against the foreign company. The appellants argued that being located abroad, the Commissioner had no jurisdiction to take action against them. However, the Original Authority and the Commissioner rejected this plea. The Commissioner's finding in the impugned order highlighted the agreement between the appellants and the Indian company, which included the right to manufacture products and provide technical assistance for a consideration and royalty. Despite the foreign location of the appellants, the Commissioner upheld their submissions based on the nature of the services provided.

3. The validity of the Order-in-Appeal, which set aside the demands confirmed in the Order-in-Original, was also a crucial issue. The learned JDR reiterated the grounds of appeal, while the learned Counsel submitted that the Commissioner (A) followed Tribunal rulings and presented a list of judgments supporting the Commissioner's view. The Tribunal considered these submissions and found the Commissioner's order to be just, legal, and proper. With a large number of citations supporting the decision, the Tribunal rejected the appeal, affirming the Commissioner's ruling and upholding the setting aside of the demands confirmed in the Order-in-Original.

In conclusion, the judgment addressed the classification of services under "Consulting Engineer," the jurisdictional aspect of proceedings against a foreign company, and the validity of the Order-in-Appeal. The decision was based on legal interpretations, precedents, and the specific facts of the case, ultimately resulting in the appeal being allowed and the Order-in-Original being set aside.