2008 (6) TMI 40 - AT - Service Tax

Respondent certain functions like inviting purchase orders, calling tenders, personal functions like maintaining leave records, maintaining books of account of sister concern regarding which sister concern make payments to the respondents - held that activities undertaken by the respondents are not covered under the definition of management consultancy service

Summary

Issues:
Whether the services provided by the respondents constitute management consultancy services for the purpose of service tax liability.

Analysis:
The appeal was filed against an order where the Commissioner (Appeals) concluded that the respondents were not providing management consultancy services. The Revenue contended that services related to marketing, finance, payment, purchase, etc., fall under the definition of management consultancy as per the Finance Act. On the other hand, the respondents argued that their employees performed specific functions like inviting purchase orders, calling tenders, and maintaining leave records, which were not covered under management consultancy services. The respondents cited a previous Tribunal decision to support their position. They also objected to a new ground introduced by the Revenue regarding sale/marketing, which was not part of the original show cause notice.

The Tribunal examined the activities carried out by the respondents, such as handling purchase orders, calling tenders, maintaining leave records, and managing the accounts of sister concerns. It was noted that the Tribunal had previously ruled that such services did not fall within the definition of management consultancy. Given the lack of disagreement over the nature of the services provided by the respondents and the precedent set by the earlier Tribunal decision, the current appeal was found to lack merit. Consequently, the Tribunal dismissed the appeal, affirming that the services in question did not amount to management consultancy services subject to service tax liability.