2011 (8) TMI 910 - AT - Service Tax

Demand - Consulting Engineers - Counsel for Respondent drew attention to the invoice which describes the particulars of item charged as Fabrication Drawings of Machines as per order dated 16-12-99 and order of acceptance Ref. GEL-149/ISRCL03-99 - Revenue has not contested the veracity of the copy of invoice produced by the Respondent. Considering the copy of the invoice it has not been fair on the part of Revenue to argue this case by inserting a preposition which ought to have been there but was not there - Appeal is rejected

Summary

Issues:
1. Whether the Respondent should have paid service tax on the amount received for Fabrication Drawings of Machines.
2. Whether the sale of engineering drawings by the Respondent amounts to providing service as a Consulting Engineer.
3. Whether the Respondent had the legal right to sell the drawing and if the drawing was prepared by them.

Issue 1:
The Respondent, engaged in Commissioning and Installation business, received an amount for Fabrication Drawings of Machines from another company. The department contended that this amount should have been subject to service tax under Consulting Engineers category. A Show Cause Notice was issued, leading to confirmation of demand, interest, and penalties by the adjudicating authority.

Issue 2:
The Respondent appealed to the Commissioner (Appeals) who found that the drawings were received from an Australian firm and sold to a different company. The Commissioner held that this sale did not constitute service as a Consulting Engineer based on a Tribunal decision. Consequently, the order of the adjudicating authority was set aside.

Issue 3:
The argument presented by the Ld DR emphasized that the bill was for the "Fabrication of drawings of machine," suggesting the preparation and supply of the drawing. It was contended that the Respondent failed to prove permission for selling the drawing or its legal import into India. However, the Respondent's counsel highlighted the invoice detailing the item as "Fabrication Drawings of Machines," clarifying that it was drawings for fabrication.

In the judgment, it was noted that the Revenue did not challenge the authenticity of the invoice provided by the Respondent. The misinterpretation of the term "Fabrication Drawings" by the Revenue was addressed, emphasizing the importance of accurate language usage. The burden of proof regarding the origin of the drawing was highlighted, with the Tribunal emphasizing that this burden was not met by the Revenue. As the Respondent's claim that the drawing was made by a German company and they only owned it remained uncontested, the Appeal by Revenue was deemed not maintainable, leading to its rejection, and the cross-objection by the Respondent was disposed of accordingly.