2015 (7) TMI 711 - AT - Service Tax

Demand of service tax - Architecture service - Bar of limitation - whether the appellant has provided any architect services, to its clients, so as to make him liable to pay the Service Tax - Held that - Admittedly the appellant is neither an architect nor is he registered under the Architects Act. This fact also stands admitted by Commissioner (Appeals) - original adjudicating authority has observed that all evidences produced by the noticee reveal that Shri Ashish Bhattacharya did not have professional competence to provide their service as architect. Any effort made on their part was stopped by the Indian Institute of Architects, MP Chapter, Bhopal. MP Housing Board also cancelled the order placed by them due to lack of professional clarifications. - M/s. Designing Cell is a proprietary unit under the proprietorship of Shri Ashish Bhattacharya. The proprietary unit and the proprietor are required to be treated as one and the same. In that scenario also if Ashish Bhattacharya is not an architect, his proprietary unit cannot be considered to be an architect. Demand is barred by limitation, having been raised beyond the normal period of limitation. In view of the complex nature of the issue, no suppression can be attributed to the appellant so as to invoke the longer period of limitation. Further, the original adjudicating authority has also held in favour of the assessee, which fact shows that the issue is capable of two different interpretations, in which case no mala fide can be attributed to the appellants. Accordingly, we hold that the demand is also barred by limitation.

Summary

Issues:
1. Whether the appellant provided architect services, making them liable for Service Tax.

Analysis:
The dispute revolved around whether the appellant, a sculptor and artist, provided architect services to clients, thereby incurring a Service Tax liability. Initially, a Show Cause Notice was issued proposing recovery of service tax for alleged architect services rendered. The Deputy Commissioner dropped the proceedings, stating the appellant did not meet the definition of architect services as he lacked an architect degree and was not registered under the Architects Act. However, the Commissioner (Appeals) reversed this decision, confirming the demand and imposing penalties, leading to the current appeal.

Upon review, the Appellate Tribunal found that the appellant was neither an architect nor registered under the Architects Act, a fact acknowledged by the Commissioner (Appeals) as well. The definition of architect services under Section 65(105)(P) includes services by a person registered under the Architects Act. The original adjudicating authority noted that the appellant's firm was not recognized as an architectural consultancy firm by the Indian Institute of Architects, indicating a lack of professional competence. This evidence was supported by the cancellation of orders due to insufficient professional qualifications.

The Commissioner (Appeals) argued that since the services were provided by a separate commercial concern, registration under the Architects Act was irrelevant. However, the Tribunal disagreed, emphasizing that the definition of architect includes any person or commercial concern registered under the Act. As the appellant's firm was a proprietary unit under an individual lacking architect qualifications, it could not be considered an architect.

Furthermore, the Tribunal ruled the demand was time-barred, as it was raised beyond the normal limitation period. Given the issue's complexity and the differing interpretations by authorities, no malice could be attributed to the appellant, warranting a limitation on the demand. Consequently, the Tribunal set aside the impugned order, allowing the appeal and restoring the Order-in-Original.

In conclusion, the judgment clarified the criteria for architect services, emphasized the importance of registration under the Architects Act, and highlighted the limitation period for tax demands, ultimately ruling in favor of the appellant.