2014 (10) TMI 280 - AT - Service Tax

Scientific and Technical Consultancy Services - Services are rendered by public funded institutions or private agencies - Held that - Scientific or technical consultancy means any advice, consultancy, or scientific or technical assistance, rendered in any manner, either directly or indirectly, by a scientist or a technocrat, or any science or technology institution or organization, to any person, in one or more disciplines of science or technology - appellant herein is a manufacturer of textiles and by no stretch of imagination, it can be perceived that the appellant is a science or technology institution or Organisation. Therefore, the Appellate Commissioner is right in holding that the service rendered by the respondent in this case does not fall within the purview of taxable service of Scientific and Technical Consultancy - Decided against Revenue.

Summary

Issues:
Appeal against Order-in-Appeal regarding classification of service as 'Scientific and Technical Consultancy Services' for tax liability.

Analysis:
The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai Zone-I. The main contention raised by the Revenue was that services provided by public funded institutions or private agencies in the field of science or technology are taxable under 'Scientific and Technical Consultancy Services,' attracting service tax liability.

The definition of 'Scientific and Technical Consultancy Services' under Section 65(77) of the Finance Act, 1994 was crucial in this case. It encompasses the provision of advice, consultancy, or scientific and technical assistance by scientists, technocrats, science or technology institutions, or organizations in various disciplines of science or technology. The appellant, a textile manufacturer, did not fall within the scope of being a science or technology institution or organization, as per the definition.

The Appellate Tribunal upheld the decision of the Appellate Commissioner, stating that the services provided by the appellant did not qualify as 'Scientific and Technical Consultancy Services' for the purpose of service tax liability. The Tribunal found no merit in the Revenue's appeal and dismissed it accordingly. Additionally, any cross-objection was also disposed of by the Tribunal.

In conclusion, the Tribunal's judgment clarified the scope of 'Scientific and Technical Consultancy Services' under the relevant provisions of the Finance Act, 1994, emphasizing the necessity for the service provider to meet specific criteria to fall within the taxable category. The decision highlighted the importance of precise classification and interpretation of services to determine tax liabilities accurately.