2015 (1) TMI 1198 - AT - Service Tax

Management Consultancy Services - Activity of supervision of fabrication and erection of supporting structures and equipment from the client - Invocation of extended period of limitation - Held that - In this case the activity undertaken by the appellant is only supervision of fabrication and erection of supporting structures and equipments. From the records it does not reveal that appellant is providing any other assistance to their clients or appellant is providing any kind of advice to their clients. In the factual matrix, it cannot be termed that appellant is providing technical assistance to their clients. Consequently, the activity of the appellant does not fall under the category of Management Consultancy Services. Further, we find that in the show cause notice there is no allegation of fraud, collusion, suppression, willful misstatement and suppression of fact by the appellant and it has not been alleged that appellant was having any malafide intentions not to pay any service tax. In these circumstances, extended period of limitation was also not invokable. - Decided in favour of assessee.

Summary

Issues:
Appeal against service tax demand, interest, and penalties confirmed. Allegation of providing Management Consultancy Services. Invocation of extended period of limitation. Failure to register with the service tax department.

Analysis:
The appellant appealed against an order confirming service tax demand, interest, and penalties imposed under the Finance Act, 1994. The case involved the receipt of a commission for supervision of fabrication and erection of structures and equipment, categorized by the revenue as Management Consultancy Services. The appellant argued against the invocation of the extended period of limitation, citing no allegations of suppression, fraud, collusion, willful misstatement, or fact suppression in the show cause notice. The appellant contended that they were solely engaged in supervision work and not providing technical assistance or advice to clients, thus not falling under Management Consultancy Services.

The Revenue, however, asserted that the appellant's supervision constituted technical assistance, requiring registration with the service tax department. They argued that the commission received was discovered through the appellant's balance sheet for a specific year, justifying the extended period of limitation. The Tribunal examined the submissions and found that the appellant's activity was limited to supervision without providing additional assistance or advice to clients. As such, it did not qualify as Management Consultancy Services. Notably, the show cause notice lacked allegations of malafide intentions or tax evasion by the appellant, rendering the extended period of limitation inapplicable.

Consequently, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal, emphasizing the absence of technical assistance provided by the appellant and the lack of grounds for invoking the extended period of limitation.