2013 (11) TMI 1307 - AT - Service Tax

Demand of service tax liability - Consulting Engineering Services - soil testing, exploration survey and map making for laying pipe lines - First appellate authority set-aside the demand of service tax by holding that the activities undertaken by the respondent would get covered under the category of Survey and Map making by agencies other than the Government - Held that - services rendered by the Appellants do not involve any consultancy, advice and technical assistance as well as the fact that the new services covering the services in question have been introduced at a later date. I am inclined to agree with the Appellants that during the period in dispute these services are not taxable under the category of Consulting Engineers Service - Scientific and Technical Consultancy Services, which was a new service introduced on 16-7-2001, was not a part of the pre-existing Consulting Engineer Service prior to the said date. On the same analogy, the services rendered by the Appellants, being new services introduced from the respective dates, will not be part of the pre-existing Consulting Engineers Service prior to the said dates. Accordingly, the demand confirmed by the Adjudicating Authority is not sustainable and hereby set aside. Since the demand is not sustainable, penalty and interest cannot also sustain - Following decision of CCE & C, VADODARA-II Versus MASCON MULTISERVICES & CONSULTANTS PVT. LTD. 2008 (12) TMI 89 - CESTAT, AHMEDABAD - Decided against Revenue.

Summary

Issues Involved:
Demand of service tax liability for Consulting Engineering Services during April 1999 to March 2004.

Analysis:
The appeal was filed by the Revenue against the order dated 12.01.2007, which confirmed the demand of service tax liability for Consulting Engineering Services rendered by the respondent from April 1999 to March 2004. The lower authorities held that the services provided, including soil testing, exploration survey, and map making for laying pipelines, fell under Consulting Engineering Services. However, the first appellate authority set aside the original order, stating that the activities undertaken by the respondent should be classified under Survey and Map making services chargeable to service tax from 16.7.2005.

The Revenue argued that the technical assistance provided by the respondent in laying pipelines should be considered Consulting Engineering Services. On the other hand, the consultant for the respondent highlighted that the services involved survey work for deciding pipeline routes, soil investigation, and data submission, which did not entail consultancy or technical advice. The consultant referred to a similar case where the Tribunal ruled in favor of the assessee, and the High Court upheld the decision.

Upon reviewing the records, it was found that the services provided by the respondent did not involve consultancy or technical advice, as required for Consulting Engineering Services classification. The first appellate authority's decision was supported by the fact that new services like Technical Testing and Analysis, Survey or Exploration of Mineral Services, and Survey and Map Making were introduced on specific dates, and the respondent's services aligned with these categories.

The first appellate authority's decision was further justified by citing precedents where new services introduced on specific dates were not considered part of pre-existing services. The Tribunal concurred with the first appellate authority's conclusion that the respondent's services should be classified under Survey and Map making Services effective from 16.7.2005. The Tribunal also noted a previous judgment in a similar case where the decision was in favor of the assessee and upheld by the High Court.

In light of the above analysis and considering the factual position, the Tribunal found no reason to interfere with the first appellate authority's decision. The Tribunal concluded that the impugned order was legally sound and rejected the appeal filed by the Revenue.