2007 (2) TMI 666 - AT - Service Tax

Summary

Issues involved: Determination of service tax category - Consulting Engineer vs. Management Consultancy

Summary:

Issue 1: Determination of service tax category

The appellants, registered as Consulting Engineers, were paying Service Tax. The Revenue argued that the appellants' activities in software sales, development, maintenance, consultancy, and training should be categorized as 'Management Consultancy.' However, a previous Final Order by the Tribunal had accepted the appellants' plea to be classified as 'Consulting Engineer.' The learned Counsel submitted that the issue had already been decided in the appellants' favor for the previous period. The learned JDR filed a cross objection, asserting that the services fell under 'Management Consultancy.' Upon careful consideration, the Tribunal found that the previous Final Order in the appellants' favor was applicable to the present case as well. The Tribunal affirmed that the services rendered by the appellants indeed amounted to Consulting Engineer services. Consequently, the impugned orders were set aside, and the appeals were allowed in favor of the appellants.

Issue 2: Application of previous Final Order

The Tribunal referred to a previous Final Order in the appellant's own case, where it was established that the services provided by the appellants fell under the category of Consulting Engineers. The Tribunal noted that the Government of India had recognized Software Engineers as Consulting Engineers, as evidenced by an exemption Notification. The Tribunal agreed with the previous view that the services provided by the appellants were advisory in nature and involved consultation and advice, thus falling under the ambit of Consulting Engineers as per the Finance Act, 1994. Consequently, the Tribunal set aside the impugned Order-in-Original and allowed the appeals with consequential relief.

Conclusion:

The Tribunal, based on the previous Final Order and the nature of services provided by the appellants, determined that the appellants should be classified as Consulting Engineers for the purpose of Service Tax, rejecting the Revenue's argument for categorization under Management Consultancy. The appeals were allowed in favor of the appellants, setting aside the impugned orders and providing consequential relief, if any.